Seven of the 11 naval frigates based at Devonport, in Plymouth, could be relocated, possibly to Portsmouth.
Three of its Trafalgar class attack submarines will also be transferred to Faslane in Scotland, Armed Forces Minister Bob Ainsworth said.
But Devonport could also become the main UK centre for major refits of surface ships.
The move is part of a shake-up in which Portsmouth will host the next generation of frigates.
Four miles of waterfront
Refuels and refits four Vanguard-class submarines
Home to: Four Type 22 and seven Type 23 frigates
Seven Trafalgar class submarines
Three amphibious assault ships
Flag Officer Sea Training (FOST) base
It is the result of the Maritime Change Programme, a Ministry of Defence (MoD) review to improve "efficiency and effectiveness" which started 22 months ago.
Mr Ainsworth said that, subject to MoD investment decisions, Portsmouth will be home to the new class of frigates, known as the Future Surface Combatant (FSC).
They will be berthed alongside the new Type 45 destroyers currently being introduced to service as well as the new Queen Elizabeth class aircraft carriers currently on order.
Mr Ainsworth said the seven Type 23 frigates based at Devonport would stay there for at least five years and then they could move to Portsmouth and the four larger Type 22 frigates would remain in Plymouth.
Three of the newer Trafalgar class submarines, which are currently maintained and fuelled at Devonport, will relocate to Faslane, while four will stay at Devonport.
Mr Ainsworth said the majority of surface ship major refits will go to Devonport, subject to commercial negotiations with Devonport's owners Babcock Marine.
Babcock Marine welcomed the announcement, saying it would allow it to "rationalise facilities and resources".
Del Northcott, from one of the base's unions, Prospect, said: "Potentially it is a good result, but there is no indication of when and how big these refits will be."
Devonport - the naval base and the commercial dockyards - is estimated to support about 24,000 jobs, according to a University of Plymouth study.
The cloud of uncertainty continues to hang over us
MP Gary Streeter
On Tuesday, during a debate on Devonport's future, Mr Ainsworth promised MPs that the workforce of about 4,500 would stay "roughly" the same.
Tim Jones, chairman of Devon and Cornwall Business Council, said: "It's better news than I was expecting.
"We can now see a secure future for Devonport for at least the next 15 or 20 years."
South Devon MP Gary Streeter said: "The cloud of uncertainty continues to hang over us.
"They are celebrating in Portsmouth and Faslane, but not in Plymouth."
Workers' reaction on changes at Devonport
Plymouth Devonport MP Alison Seabeck said: "This will bring more work to the dockyard because these refits are complex and time consuming.
"This will also help us to retain a good skills base."
Devonport Naval Base Commander, Commodore Ian Jess, said: "Devonport will long continue to play an integral role in support of the Royal Navy."
Devonport will also remain the dedicated home for the amphibious fleet and survey vessels along with a force of Royal Marines' landing craft and personnel.
This looks to be very good news for Portsmouth
Portsmouth MP Mike Hancock
Mr Ainsworth said: "We undertook this extensive review to ensure that we match the infrastructure in place at the naval bases to the needs of the Royal Navy of the future.
"By locating our aircraft carriers, Type 45 Destroyers and the first and most complex war fighting variant of the planned next generation of frigates here in Portsmouth, the naval base will build on its strengths and the duplication of facilities elsewhere will be reduced."
Mike Hancock, Liberal Democrat MP for Portsmouth South and member of the parliamentary defence select committee, said: "This looks to be very good news for Portsmouth.
"The naval base is particularly important to the city in these difficult economic times and I believe it will go from strength to strength."
Devonport navy base and dockyard are one of the main pillars of the region's economy
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