Leeds has been selected as the official training base for China's athletes ahead of the London 2012 Olympics.
About 300 athletes, coaches and support staff representing China in at least 11 sports will be based in the city as they acclimatise to conditions.
The initial benefit from hosting the team is expected to be a minimum of £250,000. The leader of Leeds Council, Keith Wakefield, said it was "a historic and magnificent achievement" for the city.
A deal had previously been announced in March for Leeds to be the training base for the China track and field team. Now Chinese officials have decided to make the city their official European pre-Games headquarters for their Olympic programme.
The athletes coming to Leeds will be representing their country in mountain biking, fencing, modern pentathlon, athletics, swimming, women's water polo, women's handball, women's hockey, table tennis, boxing and tae kwon do.
The majority of sportsmen and women will be based in accommodation at the University of Leeds.
They will train in facilities at the city's two universities as well as the John Charles Centre for Sport and venues further afield such as Dalby Forest for mountain biking, Bishop Burton near Beverley for modern pentathlon and Wakefield for hockey.
Among the athletes expected to train in Leeds will be 100m hurdler Liu Xiang, who is among the favourites to win gold in London.
The agreement is expected to provide a major long-term boost to trade and tourism as well as strengthening cultural ties with China.
"For China to choose Leeds as their official pre-Games European base is a phenomenal honour," Wakefield said, "and its effect will go way beyond the financial benefit or simply raising the profile of our city."
Gary Verity, chief executive of Welcome to Yorkshire and chair of Yorkshire Gold, added: "We see China as a significant long-term investment."