Victoria Square House, in central Birmingham, has been chosen as the head office for the Gambling Commission, the newly-established independent watchdog for gambling in Britain.
The commission is moving to the city as part of Chancellor Gordon Brown's drive to shift Government bodies out of London and into regions such as the West Midlands.
It follows a review of Government agencies by Sir Michael Lyons, former chief executive of Birmingham City Council.
In his inquiry, commissioned by Mr Brown, Sir Michael concluded that all new official bodies should be located outside the capital.
The commission has replaced the Gaming Board for Great Britain and will oversee reforms of the gambling industry.
Announcing its new location, Commission chief executive Jenny Williams said: "We're delighted to have secured Victoria Square House for our new headquarters. It's a stunning building in the very heart of the city.
"Birmingham has a thriving professional services sector, a substantial labour pool, and a central location.
"We are among the first of a number of public sector bodies moving out of the capital as a result of the Government's Lyons review, and Birmingham is the obvious choice of location.
"This is a very exciting time for the Gambling Commission. We are taking on significant new responsibilities and will be growing from a pool of 70 staff to over 250 people by the time we are fully up and running, including the head office in Birmingham and field staff spread across the country.
"We have begun a major recruitment campaign, and believe our new location will us help attract the best candidates."
The move to Birmingham from London will begin in January 2006, and all functions and staff will have moved by June.
Simon Murphy chief executive of Birmingham Forward, the body representing Birmingham's professional sector, said: "We very much welcome the decision of the Gambling Commission to locate its headquarters in Birmingham."