This year's Irish Open will be staged at Royal Portrush for the first time since 1947.
The European Tour confirmed on Friday that the tournament will take place at Portrush from 28 June to 1 July.
The Northern Ireland Executive is expected to provide around £2m of funding for the event while additional sponsorship is also being sought.
European Tour chief George O'Grady said that links courses "do not come any better than Royal Portrush".
A successful staging of this year's event could boost hopes of The Open Championship returning to Royal Portrush for the first time since 1951.
"We have been urged to play more events on great links courses and we are delighted to make this announcement today," added Mr O'Grady, who also revealed that the 2013 Irish Open will take place at Carton House.
The European Tour chief executive, who added that the Portrush event will have a "minimum 2m Euro prize fund", paid tribute to the Irish Government for supporting the tournament's move to the Northern Ireland venue for 2012.
"The speed with which this has come together for the good of all of Ireland has been tremendous."
The 2011 championship in Killarney had a 1.5m Euro purse and O'Grady said that had been "a lot of enquires from additional commercial interests" since news of the event's move to Portrush broke on Thursday.
Ireland's major winners Darren Clarke, Rory McIlroy, Graeme McDowell and Padraig Harrington have all welcomed the news.
Open champion Clarke was present at Friday's official announcement at Portrush and said that it would be "an awesome venue for the event".
He said other players had already been asking him about the course and where the best places to stay were.
"It's going to be an unbelievable week," added Clarke.
US Open champion McIlroy has already guaranteed his participation at Royal Portrush and spoke of his delight at the return to event to Northern Ireland for the first time since it was staged at Belvoir Park in 1953.
"I'm delighted that I was able to work on my schedule that I can play in the Irish Open," said McIlroy.
McDowell and Clarke, who both have strong links with the north coast, have agreed to act in an ambassadorial role for Royal Portrush, which will celebrate its 125th anniversary in 2013.
"Fantastic news on the Irish Open 2012 coming to Royal Portrush," McDowell told his Twitter followers.
"Always been a dream of mine to play a top event in my home town," he added.
Harrington described the decision as an "inspired moved", adding that Portrush "is my favourite golf course in the world".
Killarney has hosted the Irish Open over the last two years while there was been speculation that it would be staged in the Dublin area in 2012 but that has been delayed to next year when it will be played at Carton House.
Harry Bradshaw won the Irish Open when it was last held at Royal Portrush, which also hosted the event in 1930 and 1936.
The Open Championship was last played at Portrush in 1951 and there was a clamour for the major to return to the course after Clarke's triumph at Sandwich last year.