Wylfa nuclear power plant on Anglesey is to continue generating electricity for around another two years, say industry regulators.
The Magnox-type reactors were due to shut down in December after 39 years.
The extension of the plant's lifespan secures 200 jobs, while there are still hopes of a new plant being built nearby within 10 years.
An agreement on the extension was agreed with the Health and Safety Executive (HSE).
Nick Gore, Wylfa site director, said: "I'm absolutely delighted with the news.
"It is a reflection of the hard work put in by our experienced staff in satisfying the requirements of the Periodic Safety Review and very ably supported by our record of excellence in safety, operations and maintenance.
"This is all down to the quality of our staff on site and with our plant and equipment in excellent condition; we can look forward to the future in confidence."
Staff at the site, which is run by Magnox North and owned by the Nuclear Decommissioning Authority (NDA), have spent the last 12 months preparing the case to extend electricity generation at Wylfa.
The process involved a safety review by the Health and Safety Executive, and the plant will undergo a further review by the regulator as generation continues.
The site employs about 650 directly, while an estimated 500 jobs rely on Wylfa through contractors and suppliers.
Dr Sara Johnston, from the NDA added: "Wylfa's continued generation is excellent news as it will deliver significant extra revenue from one of the NDA's valuable assets.
"The income generated over the extension period will support our clean-up mission. I would like to thank Magnox North for the tremendous work they have done to help make this happen."
The decision has also been welcomed by Welsh Secretary, Cheryl Gillan: "Wylfa plays a vital role in the local economy and today's announcement will be a great boost for its workforce.
"The decision to continue generating low carbon electricity at the site will also make a huge contribution to the NDA's decommissioning mission."
Ynys Mon AM Ieuan Wyn Jones said the extension was "crucial" to the island's economy.
"It is good news that the plant will be able to continue generating electricity for another two years, offering much needed peace of mind for the workers and their families," he said.
Anglesey council welcomed the "reducing of the gap" between the start of decommissioning and the potential start of building of a replacement station.
Council leader Clive McGregor added: "Continued generation at Wylfa is good news for the Island's economy during increasingly uncertain times."
However, campaigners opposed to nuclear power have reiterated their objection to the extension.
Dylan Morgan, of People Against Wylfa B (Pawb) said the plant should be closed, as planned in December this year.
"They have already had two extensions - it is well past its design life," he said.
"It can only increase the danger during operation, and it increase the waste produced."
A location near the existing Wylfa site has already been earmarked for a new nuclear plant, which could be operational by 2020.
The developer hopes a planning application will be lodged by the end of 2011.
Horizon Nuclear Power said a new station could deliver up to 800 high quality permanent jobs, rising to 1,000 during maintenance and up to 5,000 jobs during construction.