The Defence Fire Training and Development Centre in Manston is set to close, with training being transferred to a Cotswold town.
It comes after a 12-year contract, worth £525 million, was agreed in July to outsource Ministry of Defence fire and rescue operations to private company Capita Business Services.
The intention to award the MoD's fire and rescue project contract to Capita was announced in June.
In a statement to parliament, Defence Minister Tobias Ellwood said following a "competitive" bidding process, Capita’s bid was deemed to "deliver the best technical solution and the best value for money for defence."
Mr Ellwood said the project would deliver a range of benefits including "improved safety for firefighter personnel and those they protect as well as fire risk management for the department". This would be achieved, he said, through investment in new equipment, technology and training.
However, the centre at Manston will be closed down with training transferred to Capita’s existing fire training facility at Moreton-in-Marsh.
Mr Ellwood said: "The award of this contract will enable the Ministry of Defence to vacate large elements of the Manston site which will be released to support economic development, potentially including housing, in the local area."
Initially, about 560 MoD civil servants, mainly firefighting personnel, are expected to transfer to Capita under Transfer of Undertakings (Protection of Employment) regulations as the contract is implemented over the next few years.
Mr Ellwood said fire station managers, their staff and Trade Union representatives of the civilian workforce had been consulted throughout the project.
He also said it had been a "complex" procurement, with a delay in the award of the contract following a legal challenge from Serco Ltd – the other final bidder – and that the government had agreed an out-of-court settlement of £10 million to settle the dispute.
It is not yet known when the Manston centre will be closed.