About 3,600 British troops are to leave their bases in Germany and relocate to the UK.
Ministers have given provisional approval for the move to sites in Gloucestershire and Shropshire.
The units affected are HQ Allied Rapid Reaction Corps (HQARRC), 102 Logistics Brigade and 1 Signal Brigade.
HQARRC will move to RAF Innsworth in Gloucestershire, and the rest to the Defence College of Aeronautical Engineering in Shropshire, from 2009.
Armed Forces Minister Bob Ainsworth said the announcement was "significant" for the personnel involved and their families, but added that 15,000 British troops would remain in Germany for years to come.
The move would help deliver "operational capability in a more efficient and effective way" and would make better use of the MoD estate in the UK.
"This announcement doesn't change the close relationship we have with Germany or our commitment to our NATO responsibilities," he added.
The MoD said that detailed plans will now be drawn up for the moves to the UK, starting with HQARRC, which could move between 2009 and 2011.
RAF Innsworth had been earmarked to close, with the loss of thousands of jobs.