Welsh Secretary Peter Hain has said a proposed £14bn military training academy at St Athan would be a massive boost for the whole of south Wales.
An artist's impression of how the military academy would look
The BBC understands RAF St Athan, Vale of Glamorgan, is the leading contender for a UK government investment which could create up to 5,000 jobs.
Mr Hain said St Athan's bid was "exceptional" but added the Ministry of Defence (MoD) would decide impartially.
Local MP John Smith said St Athan was the best site for the planned academy.
Sources told BBC Wales' Dragon's Eye programme that the St Athan bid, led by a consortium known as Metrix, is the leading contender for the project against a number of others, including RAF Cosford in Shropshire.
If successful, troops from all the UK's armed forces would be trained at the airbase.
Peter Hain believes the bid is an 'exceptional' one
Speaking on the programme, Mr Hain said: "The St Athan bid put together by Metrix is a very strong bid, there's no doubt about it.
"It will bring in thousands of jobs. It would be a world-class facility, the like of which there isn't in the whole of Europe."
However, Mr Hain stressed previous job losses at St Athan, including the scaling down of work on Tornado jets which will see the current 900 jobs halved by next year, would not influence the MoD's decision.
"This will not be decided on what's gone before. It will be decided on if it's the best bid.
"They can't take into account any other factors, the Red Dragon [fast jet repair facility] collapse or anything else," he said.
However, he was optimistic about the benefits to the area if the training academy bid was successful.
"It will bring a huge surge in local consumption and spending in the area.
"It's not just about St Athan, which has suffered job losses in recent years, but for the whole of south Wales and the surrounding areas."
Vale of Glamorgan MP John Smith said no other UK site could accommodate the new military training academy as well as St Athan.
RAF aircraft support work is already being transferred from the base
He said: "In its heyday, RAF St Athan had 14,000 personnel on that base and they worked alongside the local community without any difficulty.
"It's the largest military base in the United Kingdom. This is a 600 acre cleared site development with the exception of the Red Dragon hanger.
"We can accommodate it with no problem - nobody else could - and that's why I am so confident."
The MoD will announce the successful candidate following the end of a defence training review in November.
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.
Two investments are available, together worth up to £14bn. It is believed that at least one section would go to Wales.
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.