The British Army is planning to return all its units based in Germany to the UK by 2020
New accommodation is to be created for the British armed forces.
An extra 2,600 bed spaces will be created at MoD facilities at Salisbury Plain and Aldershot for service personnel and their families by 2020.
Defence Secretary Sir Michael Fallon said the £1.1bn will create 200 jobs in south west England.
It will also improve office, technical, catering, retail and leisure facilities for the armed forces, he added.
Sir Michael said: "Our armed forces deserve facilities and housing that match the need of this generation.
"We're committed to delivering a better defence estate, ensuring our Armed Forces are properly supported and provided for.
"With our defence budget secure and rising to 2020 we can now properly invest in our soldiers, their families and communities."
The scheme will allow all British Army units based in Germany to return to the UK by 2020, resulting in savings of up to £240m per year by 2022/23, Sir Michael added.
