The World Snooker Championship will remain at the Crucible in Sheffield until 2045, with the venue set to be refurbished to add up to 500 additional seats.
The new long-term deal at the 980-capacity theatre also includes an option to extend it to 2050.
During the redevelopment period after the 2028 edition, the tournament will be hosted in 2029 at an alternative venue.
National and local government will supply £35m of the £45m revamp cost, with the other £10m coming from the private sector.
Snooker’s premier event has been staged at the Crucible since 1977, with the current deal running until 2027.
Matchroom Sport president Barry Hearn said last April that the tournament would have to move from its long-time home after 2027 if the venue was not revamped or replaced.
Hearn said the venue was “no longer fit for purpose” but added the World Snooker Tour ideally “want to stay” at the Sheffield theatre.
China and Saudi Arabia were suggested as possible alternatives for hosting the tournament.
“For over 50 years, I have been promoting sport all over the world, but no venue on this planet means more to me than the Crucible,” Hearn said of the new deal.
“My thanks must go to Sheffield City Council for all of their hard work in ensuring this great tournament remains at its spiritual home.”
Last May, Zhao Xintong made history to became the first player from China to win the World Championship.
Some players, including Ronnie O’Sullivan and Iran’s Hossein Vafaei, have criticised the venue for being too small but 2005 champion Shaun Murphy called it “holy ground” for competitors.
Up until the semi-finals, the World Snooker Championship is played with a two-table set-up, meaning space is tight and the fans are close to the players.
Other significant improvements such as enhanced spectator facilities will be included in the refurbishment.