The National Videogame Arcade has closed in Nottingham ahead of its move to Shefield later this year.
The BGI, the national agency for games modelled on the British Film Institute, will open its headquarters at the Sheffield Kollider - a new hub for creative and techonology industries currently being developed in the former Co-op Castle House in Castlegate.
The facility is due to open in Sheffield in late October 2018.
It welcomed more than 50,000 visitors per annum who learnt about games culture and development.
Rick Gibson, chief executive of BGI, said: "Our move to Sheffield is a big statement for BGI. After looking at multiple locations across the UK, we’ve chosen Sheffield because it has a vibrant creative technology sector, a fantastic track record in games led by Sumo Digital, one of the best games universities in Sheffield Hallam and a growth-focused culture.
"The Kollider building is a unique opportunity for BGI to be at the heart of a growing creative cluster in the North with outstanding support from the city, wider region and DCMS."
Coun Mazher Iqbal, cabinet member for business and investment at Sheffield Council, said: "We are delighted to be able to announce this major development in our new digital and tech space in Castlegate, right in the heart of the city.
"Castlegate is on track to become a thriving digital industry quarter that is creating new opportunities and cementing Sheffield’s status as the fastest growing digital sector in the country, supporting more than 22,000 jobs and growing the economy by millions."
The BGI is an industry-led initiative, announced in January 2016, to win new funding for cultural games production, games as culture projects and games production and commercialisation skills. Following consultation with more than 120 games, arts, investment
The Kollider building is being renovated with funding from the Department for Culture, Media and Sport as part of a wider push to create a new cluster for high growth industries in Castlegate and the wider city.