Birmingham has been congratulated by the mayor of Liverpool after being named England's candidate to host the 2022 Commonwealth Games.
The city was chosen ahead of its Merseyside rival by the Department for Digital, Culture, Media and Sport.
Kuala Lumpur is likely to be the main rival bid to host the 2022 Games.
But the UK government must still decide if a formal bid will be submitted, weighing up whether it would offer "value for money for the taxpayer".
Mayor of Liverpool Joe Anderson tweeted: "Liverpool has lost its bid to host Commonwealth Games 2022 thanks to my team #proud.
"Congratulations and good luck Birmingham - wish you well."
Former Commonwealth gold medallist Brendan Foster said he was "delighted but not surprised" Birmingham had been chosen.
"It's the right time, in the right place, in a city that has all the facilities in place," said the former BBC athletics commentator and Great North Run founder, who was part of Birmingham's bid team.
"I'm convinced that Birmingham can take the next step and be awarded the Games. And when they are, they'll have the opportunity to host the best ever Commonwealth Games."
The Department for Digital, Culture, Media and Sport said Birmingham's bid had "impressed" judges.
"Birmingham's bid was considered particularly strong on its management of risk, its high quality existing venue infrastructure and its plans for a long-term sporting legacy," it said in a statement.
Alexander Stadium, the home of UK Athletics, will be upgraded into a 40,000-seat arena if the bid to host the Games is successful.
The Genting Arena would host badminton, and Arena Birmingham - which is the venue for next year's World Indoor Athletics Championships - the artistic and rhythmic gymnastics. Both have a 9,000 capacity.
Villa Park, the famous stadium of former Champions of Europe Aston Villa, would host rugby sevens.
The ground, built in 1897 and one of the most atmospheric and recognisable in world football, has previously staged World Cup and European Championship football matches, World Cup rugby games, the last ever European Cup Winners' Cup Final and a host of FA Cup semi finals.
The Symphony Hall, opened by The Queen in 1991 and home to the City of Birmingham Symphony Orchestra, would house weightlifting and para-powerlifting.
Three halls at the NEC would also be used, meaning most of the venues needed to host the games are already in place.
Coventry's Ricoh Arena would host netball, and an aquatics centre would be built in Sandwell.
Analysis by BBC News correspondent Phil Mackie
"Always the bridesmaid but never the bride" is a phrase often used about Birmingham.
The city is a perennial underdog which feels unloved and overlooked, as major projects have repeatedly been awarded either to the capital or the North West.
Its 1992 Olympics bid barely got off the ground. Despite making compelling cases to be the home to the new national football stadium and the Millennium Dome, vastly more expensive options were chosen in London.
Perhaps the hardest to take was when it lost out to Liverpool in the bid to become the Capital of Culture.
Birmingham City Council's deputy leader Ian Ward says he "can still remember the disappointment" when he heard they'd lost in 2008.
West Midlands mayor Andy Street said: "This is brilliant news for Birmingham and the West Midlands.
"We've never had a multi-sport competition like this in Birmingham and the West Midlands so this is genuinely is a once-in-a-lifetime opportunity for us."
Ian Ward, deputy council leader and chair of Birmingham's Commonwealth Games Bid Committee, said: "This is a great endorsement by the UK government of Birmingham's credentials to host the Games and recognition of the city's resolve to deliver a memorable event.
"We appreciate that it was a very close decision and that Liverpool pushed us all the way with a very compelling proposal.
"This is not the end of the journey and we look forward to working with the government as it makes its final decision to support a UK candidate city."
Brian Barwick, chairman of Liverpool's bid, said it was a "great shame" it had been unsuccessful.
But he added: "We are proud to have put together such a bold plan, and it has been incredible to see the city unite behind a common cause and come together under the banner of the Commonwealth.
"I'd like to congratulate the city of Birmingham on making it to the next phase, and would like to offer this city's support to the bid as it aims to represent the UK internationally.
"It will be great to see the Commonwealth Games back in the UK and we wish Birmingham well for the next stage in this process."