Tamworth's fight for a university in the city has spanned over the best part of a decade, with an important milestone now achieved.
The funding deed for the $26.6 million in funding from the NSW government was approved on Monday.
Federal government support through the job-ready graduates program and land donated by the Tamworth Regional Council has also led to the announcement.
The money has allowed the construction of a University of New England (UNE) campus at Tamworth's disused velodrome, which sits at one end of its main CBD street.
State MP for Tamworth Kevin Anderson said it was a landmark day.
"It's an opportunity for students who want to stay in Tamworth to study in Tamworth.
Eighteen undergraduate programs will be part of the campus, including food processing, sports science, creative arts, aviation, health, education, community services, and Aboriginal and cultural programs.
However, not all courses will be taught at the new campus.
"Rooms will be available for tutorials, but if you're studying aviation, it will be done at the airport. If you're studying health, it will be done at the hospital," Mr Anderson said.
University of New England's Vice-Chancellor Bridget Heywood said it mirrored what could be studied at TAFE.
"As we go forward, not only will we look to offer degree programs but we'll build research and innovation programs on campus."
Tamworth currently has a full-running TAFE campus, which is located less than 3km from the proposed UNE campus.
Smaller UNE hubs are also located across the city, used as an outreach study centre with function rooms.
The new campus is set to be built by early next year, with land to be cleared over the next four months.
'Not the economic engine' of Armidale
The University of New England's flagship campus in Armidale has suffered setbacks to face-to-face learning including pandemic restrictions affecting lectures and international students.
The majority of students had to move to online learning.
Although UNE's on-site colleges reached 79 per cent full for the first semester of 2022, the town's population and business have declined over the past two years.
Armidale Mayor Sam Coupland said, in recent community meetings, the town's economic development was a stand-out issue.
"There's a real sense that our region has stagnated. The vibrancy has gone," Mr Coupland said.
"Plus, the shift to trimester teaching means students are only really on the ground for six months of the year. We're having to look at other options to not rely on the university."
Professor Heywood said the university was not funded to be the "economic engine" of Armidale.
"The business case for this campus found that not all Tamworth students were going to Armidale, [but] going to Sydney or Newcastle."
"They're supposed to complement each other, not cannibalise."
