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The Invictus Games have grown considerably since they were founded in 2014, with about 500 competitors taking part last year in Dusseldorf
Birmingham has won the bid to host the 2027 Invictus Games, beating off competition from Washington DC.
The event, staged every two years, sees injured military personnel and veterans from around the world compete in a range of sports.
Staged at the National Exhibition Centre (NEC), the Birmingham games will be the first time the event has come to the UK since the Duke of Sussex staged the inaugural tournament in London in 2014.
"Your city's strong ties to the armed forces community made it a formidable contender from the very start," Prince Harry said.
"We have no doubt the people of Birmingham will join in celebrating the unwavering respect and admiration we have for our veteran and service community, showing the world how their courage ignites hope and unites us all - something your city knows well."
A flag-raising ceremony with veterans minister Al Carns will be staged at the NEC on Tuesday morning to mark the announcement.
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Among those involved in 2023 were servicemen and women from Ukraine injured following the Russian invasion
The £26m government-backed bid drew on the armed forces' connections with Birmingham's Queen Elizabeth Hospital.
During the Afghanistan conflict, severely injured military casualties evacuated from Helmand province were treated at the QE Hospital in Selly Oak.
The hospital is also home to the Royal College of Defence Medicine, while the Defence Medical Rehabilitation Centre is also based in the Midlands, near Loughborough.
'Coming home'
Stephen "Hoops" Hooper, Team UK captain for the 2025 games said the announcement would "mean the world to Team UK".
"Birmingham is a special place for wounded, injured and sick service personnel and veterans, as they all come through here at some point.
"With support from the Royal British Legion for Team UK, Invictus has helped me embrace life again. As we prepare for Canada next year, it's great to know the games are coming home in 2027."
Prince Harry, who served in Afghanistan, said each city had brought "a unique spirit and vision to life for competitors, their families and spectators".
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Prince Harry, here pictured during the 2016 Invictus Games, founded the event after he visited the Warrior Games in the US in 2013
Financially struggling Birmingham City Council said a "new delivery model", developed with partners, required "no financial input" on its part.
The Invictus Games have been held across the globe in the decade since its inception, including in Toronto, Orlando and Sydney.
The 2025 event in Vancouver and Whistler, is expected to attract 550 competitors from up to 25 nations.
Three new sports, pickleball, laser run, and esports, are expected to feature in 2027.
Helen Helliwell, chief executive of Invictus Games Birmingham 2027, said the event would be "the most cohesive, sustainable event in Invictus Games history" with legacy programmes benefiting communities nationwide.