The Ministry of Housing, Communities and Local Government (MHCLG) has opened a new base across two floors of the i9 building in Wolverhampton city centre.
Around 100 staff including senior civil servants will be based there from next month, with a further 150 joining them in April, the MHCLG said.
The office was officially opened by Communities Secretary Robert Jenrick, who was serenaded by the choir from Wolverhampton Grammar School performing George Michael's Careless Whisper.
He said the site would be far more than "just a satellite office" and would for the first time "bring decision making" to the heart of the region.
"This is a really important milestone for the city and the wider region," Mr Jenrick said. "It means that young people growing up here can access very high quality jobs and play a role in making national decisions as part of government.
"It was very important to us as part of our levelling up agenda that we take decision making out of Whitehall and broaden the pool of decision makers.
"This will be the first government office outside Whitehall and the first office where ministers will be based and holding meetings. We look forward to welcoming staff to the office, and working here myself along with our other ministers."
Asked if it was possible that a Cabinet meeting could take place in the city, Mr Jenrick said: "Yes, absolutely. Wolverhampton is quite well represented within the Cabinet, as the Prime Minister had his first job at the Express & Star and is very fond of Wolverhampton."
The office, which will operate alongside the ministry's London base, is part of government plans to shift focus away from Westminster.
Councillor Ian Brookfield, leader of Wolverhampton Council, said the MHCLG office was "great for the city" and that he hoped it would be a catalyst for businesses and other government departments to open up there.
He said: "It is a huge vote of confidence in Wolverhampton. It’s also a big endorsement of the council’s ambitious plans to invest in – and develop – a new multi-million-pound commercial district in the heart of the city centre, right next to our new, award winning railway station with its excellent connections to London, Birmingham and Manchester.
“Most importantly, this investment is delivering, exciting, well-paid jobs and opportunities for Wolverhampton residents.
“The kudos of being the first place outside of Whitehall to host a Government department is creating a real buzz and interest in our city, attracting further investment which is exactly what we want to be able to ‘relight’ Wolverhampton, which has been hit hard by the pandemic.
“Wolverhampton is the ideal location in the heart of the country, with enviable connectivity to the rest of the West Midlands and beyond."
Work on the i9 – which forms part of the city's £150m interchange – was completed in August. A number of civil servants are temporarily based at the Civic Centre ahead of the move.
Recruitment for MHCLG jobs and apprenticeships is ongoing.