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The government has decided a new runway will be built at Heathrow, rather than at Gatwick, following years of speculation.

Transport secretary Chris Grayling is set to announce the decision, decided by a nine-strong subcommittee chaired by the prime minister, to the House of Commons.

The announcement will be welcome news for Grimshaw, which in July this year beat Zaha Hadid Architects, Benoy and HOK in the contest to design a new ‘hub airport of the future’ as part of Heathrow’s £16 billion growth plans. It also signals the end of Terry Farrell’s rival plans for an extra runway at Gatwick for now.

In a statement, Grayling described the decision as ‘truly momentous’.

He added: ‘A new runway at Heathrow will improve connectivity in the UK itself and crucially boost our connections with the rest of the world, supporting exports, trade and job opportunities.

‘This isn’t just a great deal for business, it’s a great deal for passengers who will also benefit from access to more airlines, destinations and flights.’

The decision comes more than a year after Howard Davies’s independent Airports Commission, set up by the government in 2012, recommended a third runway be built at Heathrow.

Even so, it is expected to be another year before MPs vote on the decision. Moreover, the Airports Commission has said construction is not likely to begin until 2020 or 2021. If approved, the runway could be completed by 2025.

According to the commission’s final report, the third runway at Heathrow will cost £18.6 billion to build. The government has said that the extra runway will deliver economic benefits to passengers and the wider economy worth up to £61 billion over 60 years, as well as creating 77,000 additional local jobs by 2030.

In addition, the government will provide a mitigation package for the local communities most affected by expansion worth up to £2.6 billion. It will include over £700 million worth of noise insulation for homes, and £40 million to insulate and ventilate schools and other community buildings.

Commenting on the announcement, Farrells partner Neil Bennett said: ’This is just another step on a winding road and we suspect Gatwick will still get its additional runway and terminal much earlier than Heathrow. There’s probably a need to expand both airports but Heathrow is not deliverable in the same timespan that Gatwick is.

‘There’s a much greater level of complexity at Heathrow because they need to either divert the M25 or place it in a tunnel. Heathrow’s expansion is also more than double the cost of expanding Gatwick which is a lot simpler and has much less local opposition.’

Three options were considered by the commission: a third Heathrow runway, an extension of Heathrow’s northern runway and a second runway at Gatwick.

At the Tory Party Conference earlier this month, Grayling said that a new runway in the South East would ‘send a signal to the world that Britain is open for business’.

But the decision is likely to divide the cabinet and is strongly opposed by both education secretary Justine Greening and foreign secretary Boris Johnson, with the latter pledging to lie down ‘in front of those bulldozers’ in a bid to stop the runway’s construction.

Former London mayoral candidate and Richmond Park MP Zac Goldsmith has also threatened to quit and run as an independent candidate if the Heathrow runway is approved.

The controversial move follows years of speculation over airport expansion in the South, which saw Johnson, when he was London mayor, back a plan by Foster + Partners for a new facility in the Thames Estuary, nicknamed ‘Boris Island’.

But this and other alternative proposals, including Weston Williamson’ s expansion of Luton AIrport, and Make’s extension of Stanstead, were side-lined by the Airports Commission three years ago.

In 2009, while Conservative opposition leader, David Cameron pledged that he would not build a third runway at Heathrow, with ‘no ifs, no buts’.

Current London mayor Sadiq Khan has backed a second runway at Gatwick instead of a third at Heathrow.

Last month, executives from Gatwick and Heathrow battled it out at the Westminster Energy, Environment and Transport Forum over which airport should expand.

John Holland-Kaye, chief executive officer at Heathrow Airport, said: ‘Leaving the EU means that it’s more essential than ever that we create trading links to the growing markets of the world – and that we control our own trade routes. ‘Only Heathrow expansion can do this. And it’s an urgent task, if we are to have a strong and fair post-Brexit economy.’

But Gatwick Airport’s chief financial officer, Nick Dunn, claimed the Airports Commission’s conclusions were misleading.

While agreeing there was a ‘pressing need’ for airport expansion in the UK, Dunn said that Freedom of Information evidence obtained by Gatwick showed that a second runway at Gatwick would achieve the ‘same economic outcome’ as a third Heathrow runway and could be built at a lower cost through longer phased expansion – as well as being better for the environment.