The Manuka Occasional Childcare Centre has won a permanent stay of execution, with the ACT government revealing they will no longer be forced to move from their prime parcel of inner-south land.
The decision comes after nearly two years of uncertainty over the future of MOCCA's site and intense lobbying by community groups.
MOCCA director Robby McGarvey welcomed the decision, saying staff and families now had some peace of mind around the future of the Flinders Way childcare centre.
Chief Minister Andrew Barr confirmed late last month that the government no longer required the centre to relocate.
"We are absolutely thrilled," Mrs McGarvey said.
"It'll enable the childcare centre to continue to be the brilliant, excellent learning environment that we have and we really love our community culture, it's really important to us.
"It's really great to see and feel the relief that's in the air for the educators as well as the families."
MOCCA had until recently been facing uncertainty about moving from its Manuka site to make way for the Canberra Services Club and Defence Housing Australia to develop the land.
"It was painful thinking that bulldozer could go through the whole thing," Mrs McGarvey said.
Mrs McGarvey said the ACT government had been "supportive of [MOCCA] and helping us along the way to understand why they needed the land back".
"They're allowing us to stay here and now and in the future [so] obviously they're making other plans for the Canberra Services Club," she said.
"We never ever wanted to deprive them of their rightful place in the community and we were happy to work along with the government."
An ACT government spokesman said last month the government would not require MOCCA to relocate should the centre not want to move.
He said the government was committed to supporting the services club, which currently operates in Barton, in finding a permanent site in the future.
Fire destroyed the club's historic premises near the Manuka Oval in 2011.
"The club may wish to return to its site close to Manuka Oval in the future as part of a possible commercial redevelopment," the spokesman said.
"This is a matter for the club and its members."
Mrs McGarvey thanked the community for their "support, persistence and unwavering commitment" which had meant MOCCA now had some certainty about its future.
Mrs McGarvey has called on the government to honour a 2014 promise to upgrade the centre's facilities.
"The reality is that we are in a building that's 53 years old and we will have to keep the upgrade of the centre facility at the forefront," she said.
She said the centre's future was positive and demand for places was increasing.
There are more than 200 children on the centre's waiting list.
The centre was recently awarded for exceeding national quality standards for early childhood education and care and school age care.
MOCCA will celebrate the achievement and the decision to allow them to remain at the Flinders Way site at an event on Wednesday.