The Department for Transport (DfT) will open a second headquarters in Birmingham and a ‘northern hub’ in Leeds, creating an initial 650 roles in the cities by 2025.
The new offices are part of Government plans to move 22,000 civil service roles from London to communities across the UK by 2030.
Grant Shapps, Transport Secretary, said: “This is a historic move for the department and part of a significant wider culture change across Whitehall.
“Transport is absolutely vital to the local communities we serve and having hubs in major cities like Birmingham and Leeds will offer a fresh perspective on how we can better serve these areas.”
Chris Heaton-Harris, Transport Minister, said: “Our department has a key role to play in this Government’s drive to level up across the country.
“Having hundreds more roles based outside of London will not only bring an economic boost for Birmingham and Leeds, but also ensure we are delivering the changes people around the country want.”
The Birmingham headquarters will include new ministerial offices, with ministers expected to spend "a significant amount of time there", the Government said.
The news of DfT creating a northern hub in Leeds comes on the back of the Chancellor Rishi Sunak confirming that the UK’s infrastructure bank will also be based in the city.
Councillor Susan Hinchcliffe, chair of the West Yorkshire Combined Authority and leader of Bradford Council, said: "This is another positive investment recognising our region’s strengths, following the decision to locate the UK Infrastructure Bank here, bringing benefits not just to Leeds but Bradford and the wider region.
"I hope it will help us as we make the compelling case for future investment in our transport system, to better connect our communities and raise living standards while cutting carbon emissions."
Councillor James Lewis, Leader of Leeds City Council added that he hoped "the presence of more decision-makers in our city helps ensure the case for further (transport) investment in Leeds is heard".
Andy Street, the Mayor of the West Midlands, said: "Along with the relocation of MHCLG to Wolverhampton, this is a major vote of confidence in the West Midlands and a huge jobs boost at what is an incredibly difficult economic time.
"I’m delighted that after months of making the case we’ve won through, and a second major government department will be calling the West Midlands home."
DfT has already begun recruiting in Birmingham and Leeds, with 100 roles created so far. This includes senior civil servant positions, which otherwise would have been based in London, with attracting senior figures to these locations key to the success of the initiative.