BBC 6 Music is being saved from closure - with the BBC Trust stating that "a convincing case" has not been made for the station to be shut down.
The BBC proposed the station's demise under a strategy rethink, sparking protests from politicians and stars from the worlds of music and broadcasting.
The Trust said the Asian Network - the other station the BBC intended to turn off - was "performing poorly" and that there was a "case for closure".
Today's announcement is welcome news for the growing number of 6 Music's fans, as well as stars like David Bowie, Jarvis Cocker, Lily Allen and Glastonbury organiser Emily Eavis, who have been vocal opponents of plans to axe it. Publicity generated by their campaign helped boost the small station's audience to more than one million listeners a week.
In the Initial Conclusions of its Strategy Review published today, the Trust wrote: "We endorse the BBC Executive's underlying ambition to do fewer things better and thereby focus the BBC more effectively on its core mission, ensure that it plays its full part in promoting the move from analogue to digital and have due regard for the BBC's competitive impact.
"The Trust does not agree that there is a consistent strategic rationale for closure on grounds either of promoting digital development or market impact."
The BBC Trust said that, if the BBC wanted to put forward a "different proposal" for the overall shape of its music radio stations to "further increase the distinctiveness of the output", it would consider it.
But it "would not expect to see a further proposal to make changes to 6 Music" unless the BBC could meet several conditions, including giving reassurance that there would be "long-term protection for the type of distinctive content currently available uniquely on 6 Music" and providing evidence that "the changes we have already requested to Radio 1 and Radio 2 are under way".
The BBC's Director-General, Mark Thompson, announced earlier this year that the station would be earmarked for closure, pending a wide-ranging strategy review.
The plan needed the approval of the Corporation's governing body, the BBC Trust.
According to previous Corporation figures, BBC 6 Music costs £9 million a year to run.
The BBC Trust also criticised aspects of the Corporation's flagship channel BBC1 today, saying it should be "more ambitious and distinctive, in particular by increasing the variety of programming in pre-watershed peak time and showing greater creative and editorial ambition at 9pm."
BBC2 needed to become "a clearer alternative to BBC1, even at the risk of reaching fewer viewers", it said.
Both BBC1 and BBC2 in daytime are "not meeting audience expectations" on the delivery of public purposes, it said.
Today's announcement came as the BBC published its annual report.
It published updated figures on its talent pay, an issue which has caused much controversy in recent years.
In 2009-10, a total of £52.2 million was spent on salaries above £150,000, down from £54.4 million in 2008-09.
Today's announcement will be seen as a victory for the campaign to save the station which had seen musicians, record labels bosses and politicians voicing their concerns. Even Gordon Brown spoke out while still Prime Minister.
The potential closure had also seen a number of protests and petitions in a bid to put pressure on the BBC to retain the station.
It will also be an embarrassment for a number of senior BBC figures who have justified the need to close the station including Mr Thompson and director of audio and music Tim Davie.
Many within the station thought the closure had seen the proposed closure as a "done deal".
Cocker, who is one of 6 Music's presenters, made an impassioned plea for the station's survival in front of radio executives when he collected the Rising Star award at the Sony Awards in May.
This morning, 6 Music presenter Lauren Laverne used her Twitter feed to express her delight: "6Music has been saved. Hooooorrrayyyyy!" she wrote.
Publicity surrounding the closure helped to raise awareness of the station and pushed audience considerably.
Its audience grew 50% in only three months, pushing it through the million listener barrier, according to figures from industry body Rajar in May.
It added almost a third of a million listeners in a quarter.
Total talent spend in 2009-10 was reduced by nearly £8 million following the controversy over the pay packets of the likes of Jonathan Ross, Chris Moyles and Jeremy Clarkson.
The Trust said 6 Music, like other BBC digital stations, was helping the take-up of digital radio listening.
It rejected the idea of moving 6 Music content into a new "2 Extra" station as part of Radio 2 and said it might be possible to grow the station's one million audience "without losing any distinctiveness".
The Trust said it had received "no evidence from the commercial radio sector to suggest that 6 Music presents any kind of threat either now or in the future so long as it remains true to its distinctive remit", adding: "We also note the strong view expressed by many in the music industry that 6 Music plays a very valuable role in the cultural life of the UK that would not be easily replaced and that would not be filled by the commercial sector."
The BBC Trust has already concluded that the station is comparable with other BBC digital radio stations in "terms of value for money".
It said there had been "a significant show of public support for the service".
The Trust has received 47,933 online responses, more than 25,000 emails and 242 letters, the majority of them focusing on 6 Music.
The BBC's Annual Report showed that total remuneration for the BBC Executive board, which includes the likes of Director-General Mr Thompson, went up in 2009-10, to £4,769 million from £4,601 in 2008-09.
Laverne thanked the station's listeners for their support and campaigning as she read out the trust's verdict during her show.
"We want to say a huge thank you for all of the incredible support you have given us and for telling the trust exactly how you feel because they have obviously heard you."
She added: "We're incredibly excited and pleased by that news about 6 Music today."
Geoff Taylor, chief executive of the BPI - which made representations to the BBC Trust to voice its fears about the impact on the music industry - welcomed today's announcement.
He said: "We are delighted that the BBC Trust agreed that the case for closing 6 Music was unconvincing.
"The trust's initial findings support our case that 6 Music makes a unique contribution to the UK's cultural life - and its requirement that any future proposal to incorporate 6 Music programming into Radio 1 or 2 must ensure long-term protection for the distinctive nature of 6 Music's content.
"We'll be watching carefully to ensure the executive's review of the BBC's digital radio strategy is not used as cover for a further attempt to close the station."
Asked at a press conference at Broadcasting House in London why the 6 Music campaign had been so successful, BBC Trust chairman Sir Michael Lyons acknowledged: "There's no doubt there's a strong public response.
"The truth is that any BBC service that came under question in terms of whether it should survive, there will always be a strong audience response."
He continued: "After further analysis, taking account of those audience reactions, also having carefully discussed this with the radio industry, our view is that you cannot take the decision to close 6 Music until you've already made progress in reshaping the big services of Radio 1 and Radio 2, and that you've got a proper and coherent digital strategy.
"That's the only context in which the trust would reconsider 6., I'm not saying even then that it would be a different decision."
Pressed further, he said: "We're not convinced on the argument to close 6.
"We believe that it has helpfully opened up a much bigger debate about the need to shape the BBC's digital services for the future and the need to focus on 1 and 2."
He said that once those jobs have been done, if the issue of 6 is revisited, "we have an open mind".
Cocker welcomed the continued survival and said the BBC should be "proud" of the station.
He said: "I'm very happy that 6 Music appears to have been saved. It's great that everyone's finally agreed with all the arguments to keep it on air.
"The BBC should be proud of 6 Music - it provides something that can't be found anywhere else on the radio. It's been a pleasure to be involved with the station and I'm glad that it'll still be here to do what it does best - play music that would otherwise go un-noticed on mainstream radio."
Simon Raymonde, who runs the UK record label Bella Union, home to bands such as Fleet Foxes and Midlake, said: "To all those thousands of people who wrote letters, signed petitions and joined protests, to the members of the trust, we must say that today is a victory for common sense."
Raymonde, a former member of the Cocteau Twins, is a board member of AIM (the Association of Independent Music).