The future of Shrewsbury's Copthorne Barracks has been thrown into doubt as part of a shake-up of Army bases.
Defence Secretary Philip Hammond has announced that all troops based in Germany would return to the UK, saving £240m a year in running costs.
It means the HQ of 143 Brigade will move from Copthorne to Donnington in 2015, alongside 11 Signal Brigade.
The Ministry of Defence (MoD) said parts of Copthorne Barracks would be sold off.
About 80 people, civilian and military, are expected to be affected.
Brig Gerhard Wheeler, commander of 143 Brigade, said: "I would love us to stay here, but as the regular Army reduces in size it needs fewer headquarters.
"It doesn't make sense for us to have one here and one at Donnington 20 miles away."
The Territorial Army (TA) and other smaller units are expected to remain, although the MoD said an ongoing review was considering the future basing of reserves.
Mr Hammond said details on what parts of the site would be sold off would be made after the review is completed.
Conservative MP for Shrewsbury Daniel Kawczynski, said the town had a "very proud tradition" of hosting the Army and the latest news came as a "great disappointment".
Mr Hammond said the MoD would consult over the disposal of the site to try to "maximise local prosperity and jobs".
Nearly a year ago, the headquarters of the Army's 5th Division moved out of Copthorne, following the Strategic Defence and Security Review.
It was one of three regional headquarters to move to Aldershot, which included the loss of 63 civilian jobs in Shrewsbury.
'End of an era'
The latest news comes as the MoD attempts to make best use of its bases and ensure room for the 20,000 troops returning from Germany.
Speaking in the House of Commons, Mr Hammond said withdrawing from Germany marked "the end of an era".
He said an extra £20m would be invested to develop army bases across the West Midlands, including improving facilities.
Some £150m is already due to be invested to bring two regiments from Germany to Beacon Barracks in Stafford.
About 1,200 personnel are expected to transfer to the town in 2015, from 1 Signal and 16 Signal regiments.
The barracks is currently home to the 22 Signal Regiment and the MoD said the moves would bring all three regiments together, improving operational capability and ensure best use of resources.