In a pivotal vote that ended a 10-month stalemate over the future of the former El Toro Marine base, Orange County supervisors voted 3 to 2 on Tuesday to allow Irvine to annex the 4,700-acre property.
Navy and Irvine officials praised the decision, which allows the Navy to move ahead with plans to sell part of the property to developers.
"This is a critical step in the process and will ultimately bring greater value to both the city and to the taxpayers," Navy spokeswoman Lt. Cmdr. Pauline Storum said from Washington.
The annexation agreement allows the county to keep 82% of the property taxes generated by redevelopment of the base.
Negotiations over the tax-sharing plan broke down last April, stalling Irvine's annexation bid. County officials had argued that because the property had been federally owned, not just one city should receive the tax revenue generated by its redevelopment.
To appease county officials, Irvine also agreed to drop plans to annex the James A. Musick Branch Jail next to the base.
But with control of the land, Irvine now wants to develop parks, sports fields, a university and exposition center on most of the property.
About 850 acres will be sold for homes and commercial buildings.
"I'm personally, and on behalf of the City Council, very gratified that ... this important milestone has been reached," Irvine Mayor Larry Agran said.
Resolving what happens at El Toro is equally important for the Navy, which closed the base in July 1999.
Several supervisors said it was time for all sides to end the fight over El Toro. In 1994, county voters approved a commercial airport for the site, but last year voters rescinded that plan and opted for the park alternative.
Supervisors Bill Campbell, Chris Norby and Tom Wilson voted for Tuesday's annexation agreement. Supervisors Chuck Smith and Jim Silva opposed the deal.
Agran said Irvine hopes to clear the annexation through the state's Local Agency Formation Commission in late May.