In a much-needed win for the Harbour City, it snatched the prize from Brisbane - where Virgin Blue has its headquarters - Melbourne and Canberra.

Ever since Virgin bucked expectations to set up in Brisbane in 2000 the carrier's moves have been watched closely and NSW Premier Morris Iemma will be hoping the Sydney base will be a bellwether for other companies.

The move is also a reassuring sign that Sydney is still a desirable place for international investment.

"NSW is open for business and we'll continue to work with major international corporations to more attract jobs and investment," Mr Iemma said yesterday.

The new base at Mascot will be home to Virgin's fleet of aircraft, including 20 new jets, and a major expansion of their domestic operations.

The site will also be a centre of excellence in training for pilots and cabin crew on the company's Embraer and Boeing 737 aircraft.

It will also be the focus for line maintenance for all their Australian-based aircraft.

"This means jobs, top quality skilled jobs for Sydney," Mr Iemma said.

"The new positions will be for pilots, aircraft maintenance engineers and cabin crew."

Mr Iemma said that as Australia's only global city, Sydney was the obvious choice for Virgin Blue's base.

"Sydney was the logical choice for their new operation," he said.

The move follows the company's move earlier this year to put the operating headquarters of its new international airline V Australia in Sydney.

The Government said that alone was expected to bring more than 50,000 extra US visitors to Sydney each year.