Ferry company Stena Line has confirmed it is moving out of Stranraer in 2007, marking an end to 150 years of ferry crossings from the port.
The firm currently sails from Stranraer
The company is to share the P&O harbour facility in Cairnryan, which lies six miles closer to the mouth of Loch Ryan.
When combined with a relocation of the Belfast terminal, 30 minutes will be cut from sailing times between Scotland and Northern Ireland.
The move will also allow an increase in the number of sailings each day.
The company had aimed to have the terminals completed by mid-2005 but this was delayed.
The company said it now planned to have the new passenger facility at Belfast, known as VT4, and the new port share operation in place in two years time, subject to planning approval.
Fredrik Lantz, director of Stena Line, said: "Over the last 10 years we have invested a total of £120m in the route and plans are well advanced to increase that investment by a further £60m with our proposed re-location to Cairnryan in the next few years.
"The Irish Sea is a key layer in Stena Line's European operations and the Belfast-Stranraer route has made a significant contribution to the continued success of the Irish Sea's performance."
Alan Gordon, route director of Stena Line, said the Belfast to Stranraer route was a "major gateway for both tourism and freight business between Northern Ireland and Scotland and as such requires a significant amount of support and ongoing development".
Before the announcement was made, Stranraer councillor Tommy Sloan said he had mixed feelings about the move.
"I think it will be a sad day for the people of Stranraer when it actually happens and we watch the last ferry sail out of the harbour," he said.
"We are also trying to see this as an opportunity for Stranraer so we can develop the waterfront and make it more attractive for visitors - it's happiness and sadness at the same time."
However, Stranraer businessman John Ross said he saw it as a big chance for the town.
"The opportunities are very significant because we are going to have what is basically an industrial site of 26 acres that will be opened up for development," he said.
He said channels in Loch Ryan previously used by the ferries could now be opened for leisure sailings.
In Cairnryan, some residents object to the inevitable increase in traffic, particularly from lorries.
James Coulter of the Cairnryan Community Committee said: "We are going to have to put up with it night and day."
Stena Line currently operates two vessels on the Belfast to Stranraer route, the Stena HSS fast ferry service and the conventional Stena Caledonia offering up to 14 sailings per day.