Hundreds of shipyard jobs have been safeguarded in Devon after the government said it was committed to building two new aircraft carriers.
About 300 people at Appledore will be working on making parts for the carriers for the next five years.
The Strategic Defence and Security Review (SDSR) also said there would be a "continuing requirement" for Devonport naval base in Plymouth.
However, the base's largest ship, HMS Ocean, faces a decommissioning study.
The SDSR aims to cut defence spending by 8% in real terms over four years.
Prime Minister David Cameron said work on the two carriers would continue following concerns that they would be axed in the SDSR.
The Babcock-owned yard at Appledore is making sections for HMS Queen Elizabeth and sister ship HMS Prince of Wales.
Former yard worker Andy Eastman said: "Appledore is a deprived area.
"This is wonderful news and prosperity will come back to this area."
Mr Cameron also said the life of the nuclear missile-armed Vanguard submarines, which are refitted at Devonport, would be extended to save money.
He said in the House of Commons: "Fundamentally for the long term it is good news for Plymouth Devonport and Portsmouth."
He also announced the SDSR would result in a reduction in numbers of destroyers and frigates from 23 to 19.
That is expected to affect Devonport, which is home to seven Type 23 frigates.
Helicopter carrier HMS Ocean is also facing a decommissioning study.
Along with aircraft carrier HMS Illustrious, based in Portsmouth, it is to undergo a short study to decide which of the two ships provides the most effective helicopter platform capability and which should be scrapped, the review said.
Mr Cameron also revealed that the Army would lose 7,000 personnel, the RAF 5,000, the navy 5,000 and the Ministry of Defence 25,000 civilian staff over the next five years.
Devon, which has 14,900 armed forces personnel and civil servants in defence-related employment, and Cornwall, which has 4,300, are expected to be affected. But the number of job losses in the counties is not known yet.
The review said: "For generations, up and down the country, many communities have given outstanding support to the armed forces.
"Nowhere is this truer than in Portsmouth and Devonport.
"Although the measures set out in this White Paper will require some changes at both locations, we will have a continuing requirement to sustain both bases."
North Devon Liberal Democrat MP and armed forces minister Nick Harvey said that the South West of England "hasn't come out of this too badly".
He said: "Parts of defence which are based in the South West are going to continue, and continue on pretty much the existing scale."
Peter Luff, Minister for Defence Equipment, Support and Technology, told the BBC there were no immediate plans to close officer training base, Britannia Royal Naval College in Dartmouth.
However, he added that fewer officers meant the government was looking at changes to training so he could not make any long-term commitments.