The former RAF base at Stafford has been saved after Ministers announced it was to be the new home of the Army's 22 Signals Regiment.
An additional 570 military personnel are to be stationed at the base, which officially closed in March following a Government defence review.
The news was been welcomed by MP David Kidney and local councillors, who said the decision would benefit the borough's economic regeneration.
Armed Forces Minister Adam Ingram said the regiment would be formed and effective from April 1 next year.
It will be formed of three squadrons - 248 squadron from Colerne, Wiltshire, 222 from Bulford, Wiltshire, and the new 217 squadron formed largely from personnel of 219 squadron in York.
He said: "The proposal will see approximately 570 additional military personnel based at the site, who will be accommodated in the Stafford area.
"It is also anticipated that approximately 200 families are likely to move to the area, and there will be a requirement for a small number of administrative posts to support the regiment."
Ministers announced last year that storage and distribution operations at RAF Stafford were to end by 2007.
The closure meant almost 1,000 jobs were lost, at a potential cost to the local economy of £17 million.
However, Mr Kidney (Lab Stafford) and the local authority have been campaigning to persuade the Ministry of Defence to find a new use for the base.
Last night the MP said he was delighted the site would continue to contribute to the defence of the country.
"The skills needed for modern communications in our armed forces are high and the Army jobs will be good quality. Service personnel and their families will live, shop and send their children to school locally. This is good for our economy.
"Our local taskforce will continue to talk to the Army about the future uses of the base and see, for example, what civilian jobs will be needed alongside the Army ones. We will also discuss what further services the base can take.
"There is much to celebrate about this decision because it brings a welcome sense of security after a time of uncertainty. It unlocks future potential at the base as well. I am very pleased that the Ministry of Defence has made this decision."
His views were echoed by Judith Dalgarno, leader of Stafford Borough Council, who said the local authority looked forward to welcoming Army personnel and their families to the town.
She said: "We have been campaigning for two years for this. Following the departure of the RAF, I set up a task force which has worked continuously with our other partners to encourage the Army to settle in Stafford.
"It has always been our priority to secure a strong future for the base, and we saw that future with the Army. This, in turn, will have an enormously beneficial knock-on effect on the future economic regeneration of Stafford Borough."
The 375-acre Beaconside base was opened in 1939, shortly before the outbreak of the Second World War.
It was used by the RAF as a centre for maintaining equipment and moving supplies by road until it was officially closed in March.
A number of armed forces bases have suffered cuts over the past two years.
In November, it was announced more than 600 jobs would be lost with the closure of a Ministry of Defence repair shop in Donnington, Shropshire, used to maintain Challenger tanks.