All of BZW, the investment banking division of Barclays Bank, will relocate to Canary Wharf in London's docklands, instead of only two-thirds.
Over 1,500 equities and corporate finance executives learnt yesterday of the move - reversing a decision two years ago to keep them in the Square Mile.
Roughly 2,000 are already due to start relocating eastwards at the end of this year. Now a total of 3,500 will have moved from six City sites by the end of 1998 - roughly in time for the opening of the Jubilee Line extension linking Canary Wharf to central London.
A spokesman for BZW said: "We concluded that in order to take on the big US investment banks head to head we have got to be all under one roof."
The decision has delighted Canary Wharf - which following yesterday's announcement is almost 80 per cent let. The Docklands scheme was only half let three years ago and is only now shaking off its white elephant image.
The move will anger the Corporation of the City of London, which has vociferously criticised Canary Wharf for poaching investment bank tenants.
But the decision has also brought a mixed response from BZW executives themselves.
Previously the brokers and mergers and aquisitions specialists thought they would be moving from a number of sites to Royal Mint Court, still in the City and until last year home to Barclays Bank's head office.
Graham Pimlott, chief executive of merchant banking at BZW, when asked how his staff had reacted to the relocation news, said: "There were mixed views, as you would expect.
"There is a general view that it will make life more difficult to meet clients in the City. But we will maintain a suite of offices in the City to see clients, so I don't think it will make it more difficult.
"In terms of BZW overall, the argument is overwhelming. The way you tried to structure [an investment bank] in 1986 is not the same as in 1996. You can't have equity and debt in different boxes - it won't work. People are broadly supportive of this view."
Mr Pimlott added that the decision did not imply any further restructuring of BZW. "This is literally a property deal."
BZW was originally going to take 520,000 square feet, and is now taking 700,000 square feet. This makes it the second biggest tenant in Canary Wharf behind Morgan Stanley, its American investment bank rival.
The main reason Canary Wharf found it difficult to attract tenants in recent years was the lack of adequate transport infrastructure. The Jubilee Line extension is seen as the key element to place the scheme on a par with the City and the West End as a business location.Reuse content