RAF St Athan is favourite to win one of the biggest government investments into Wales, creating up to 5,000 jobs, the BBC has been told.
An artist's impression of how the military academy would look
It is understood the site in the Vale of Glamorgan is now the leading contender to win much of a tender for a £14bn military training academy.
If successful, troops from all the UK's armed forces would be trained at the airbase.
A defence training review announcement is due at the end of November.
Sources have indicated to BBC Wales' Dragon's Eye programme that St Athan is the favourite to win the bid against competition from rivals, including RAF Cosford in Shropshire.
Service personnel from across the UK would go to the academy after completing their basic training for instruction in such areas as engineering, logistics, languages and intelligence.
Dragon's Eye has been told that a consortium, known as Metrix and focused on St Athan, is the front-runner.
Two investments are available, together worth up to £14bn. It is believed that at least one section would go to Wales.
Some 900 people are currently employed at RAF St Athan
The contest for the academy has led to accusations of a conflict of interest because the UK government has a big stake in Qinetiq, one of the companies involved in the St Athan consortium.
Welsh Assembly Government Enterprise Minister Andrew Davies said it was "fully supportive" of the bid and St Athan was the only site in the UK which could fully accommodate the scale of the project.
"It could be, together, the largest investment in Wales' history, but it is going to be huge for the whole of Wales and not just south Wales," he said.
Mr Davies said that winning the tender would be a remarkable victory for St Athan: "18 months ago we were not in the frame and today I think we are in pole position [for one of the bids]."
The Ministry of Defence (MoD) is due to announce the preferred bidder in November.
Currently 900 people work at St Athan - including at the defence repair agency Dara - but that number will be more than halved from March, as work on Tornado jets leaves for another site after a turnaround in UK government policy.
Over recent years, the site has been dogged with job losses.
Mr Davies said: "We think there is a moral imperative, if you like, for the UK government.
"Given the very significant public investment that has gone in and the jobs that have been lost we think these are part of the factors that must be taken into account."
Rhondda MP Chris Bryant, who has led Welsh MPs lobbying the MoD, said: "Where we, I think, win over any other competitive bids is that not only can we put it all in one site but also we have got a big hangar.
"So, for instance, we intend to put a suite of classrooms immediately next to it.
"So you can be learning about the aircraft from computers and on diagrams in the classroom and then physically walk 50ft and get inside the aircraft and know how to mend it, how to make it work, how to keep it in the air and all the rest of it."
If the bid is successful and planning permission granted, building work could begin next year and take around five years to complete.
The Defence Training Academy at St Athan could then welcome its first intake of trainees in 2012.
Dragon's Eye is on BBC 2W on Thursday at 2100 BST and on BBC One Wales at 2235 BST.