Housing Minister Robert Jenrick said his ministry will keep its London office, but have dual headquarters in Wolverhampton with a “regular ministerial presence” in the city.
Senior civil servants will also be based in Wolverhampton, ensuring this becomes a centre for policy development and decision making.
At least 500 ministry roles are set to be based across the West Midlands by 2025 – with further increases planned by 2030.
Jenrick said he expected to announce the new building for the headquarters in the spring, although contractor Graham’s i9 office building project has been touted as a potential location for the department.
Announcing the historic move, Jenrick said: “As Communities Secretary, I am determined to spread opportunity and prosperity to every part of our nation.
“That is why I am delighted to be taking the historic step of moving significant numbers of senior roles out of Whitehall and creating the first-ever ministerial office outside of Westminster in Wolverhampton.
“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. All of us at the department are looking forward to having the opportunity to work there.”