The consortium of colleges involved in building the Thirty Meter Telescope announced on Tuesday that it chose Mauna Kea for the $300 million project.
The Big Island summit was in competition with a site in Chile for the TMT.
The telescope is considered the most advanced such project ever. It is designed to have nine times the collecting area.
It is scheduled to be finished in 2018.
When completed in 2018, the TMT will enable astronomers to detect and study light from the earliest stars and galaxies, analyze the formation of planets around nearby stars, and test many of the fundamental laws of physics.
"In the final analysis, the board selected Mauna Kea as the site for TMT. The atmospheric conditions, low average temperatures, and very low humidity will open an exciting new discovery space using adaptive optics and infrared observations. Working in concert with the partners' existing facilities on Mauna Kea will further expand the opportunities for discoveries," said Edward Stone, Cal Tech's Morrisroe Professor of Physics and vice chairman of the TMT board.
"The board expresses a strong commitment to respect the long history and cultural significance of Mauna Kea to the Hawaiian people, and has committed annual funding for local community benefits and education in Hawaiim," TMT Board Chairman and University of California at Santa Barbara Chancellor Henry Yang said.
The TMT project must still get a permit from the Department of Land and Natural Resources.
"Today's decision to build the Thirty Meter Telescope atop Mauna Kea marks an extraordinary step forward in the state's continuing efforts to establish Hawai?i as a center for global innovation for the future," Gov. Linda Lingle said in a written statement. "Having the most advanced telescope in the world on the slopes of Mauna Kea will enhance Hawaii's high-technology sector, while providing our students with education and career opportunities in science, technology, engineering and math (STEM) fields."
The TMT project is an international partnership of the California Institute of Technology, the University of California the organization of Canadian universities and the National Astronomical Observatory of Japan, which joined TMT in 2008.