The Homes and Communities Agency with site owner Defence Estates shortlisted developers from an original line-up of more than 80 firms to redevelop the 365-acre Aldershot Urban Extension site in Hampshire.
The successful developer will regenerate the surplus military land at Aldershot Garrison to create a mixed-use scheme of around 4,500 homes with schools, local health centres and leisure facilities.
St Modwen has teamed up with Vinci and Argent UK is heading a consortium of bidders.
Defence Estates is expected to choose a developer by the end of the year so that work on site can start in 2012. Around half of the site has been vacated and should be completely empty by 2014.
The selected developer will be required to build a new garrison for the Ministry of Defence as well as retaining conserving some listed buildings.