About 200 jobs will remain at Sapphire House
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A Ministry of Defence (MoD) office in Shropshire which was due to close down with the loss of about 300 jobs is to remain open.
Sapphire House, in Telford, was set to close in December 2008 with work transferred to Bristol.
But the MoD said staff at the building would now be part of new organisation the Defence Support Group.
However, 100 posts will still be lost. Union officials said it was a "victory for common sense".
New positions
In September 2006 the government announced that defence procurement functions would be moved to Bristol, which would have meant the closure of Sapphire House, in Stafford Park.
But earlier this year officials launched a review of that decision.
About 200 jobs will now remain at Sapphire House, but 100 posts will be lost.
A further 50 roles based at Sapphire House were not part of the review and will remain at the site.
Public and Commercial Services Union spokesman Andy Gilbertson said: "We now need to work with management to understand the detail of today's announcement and ensure we jointly maximise the opportunity it presents."
The Defence Support Group was recently created by the merger of the Army Base Repair Organisation and the Defence Aviation Repairs Agency.
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