The government is to create a second housing department headquarters in Wolverhampton - its first ministerial base outside London.
Communities secretary Robert Jenrick MP said it will create at least 500 Ministry of Housing, Communities and Local Government jobs by 2025.
He added the move was "backing our great smaller cities, some of which have been neglected for too long".
The location of the department will be announced later this year.
Sources from the Ministry of Housing, Communities and Local Government confirmed in November the department was looking to move a "proportion" of its operations to the West Midlands.
Recruitment is already under way, with 40 roles already moved to the region in the past 12 months.
"With a dual headquarters in Wolverhampton my department will not only change where we work but how we work, signalling the end of the 'Whitehall knows best' approach," Mr Jenrick said.
"In choosing the city of Wolverhampton we are also backing our great smaller cities, some of which have been neglected for too long.
"We want to raise their stature, encourage civic pride and commercial success."
Stuart Anderson, MP for Wolverhampton South West, said it was "fantastic news for our city".
"This move will bring hundreds of jobs to our city at a time when we have ambitious plans to level up our whole community," he said.
Councillor Ian Brookfield, the leader of Wolverhampton City Council, said it was a "huge vote of confidence".
"The kudos of being the first place outside of Whitehall to host a government department will create a real buzz and interest in our city, attracting further investment which is exactly what we want to be able to 'relight' Wolverhampton after the pandemic," he said.