Sheffield could not afford miss out on an city centre HS2 link, it was claimed after ministers confirmed the rail link will stop in the city.
The Government has announced its planned route - with a spur leaving the main line just before Chesterfield, and then going through Sheffield city centre, before linking back with the main route further north.
The main high speed line will go through the Dearne Valley, meaning 16 houses in the Shimmer estate in Mexborough will have to be demolished.
Richard Wright, executive director of the business organisation Sheffield Chamber, welcomed the news and said the city could have afforded not to have HS2 going through the city centre.
He said: "We welcome this.
"It will link HS2 and transport for the North - it is more integration which is something that we've been fighting for. You will now be able to go from Sheffield to Leeds in 30 minutes.
"We believe it s a good economic return.
"When you think we've got firms like Boeing and McLaren coming and investing, the legacy park plan an the advanced manufacturing district, and there are people taking to to Channel Four about soming to Sheffield, you really have to ask yourself , if we had not got HS2, would people look at us as seriously.
"We felt there was an argument that we could not afford not to have HS2 if other cities are getting it.
"Infrastructure does not guarantee growth, but not having infrastructure can seriously hamper growth."
Coun Julie Dore, leader of Sheffield City Council, said: A city centre location is essential for the development of Sheffield’s future connectivity between cities in the north.
"Locating HS2 at Midland allows us to integrate HS2 with HS3 and it is now important that Government commit to funding the improvements for 30 minute city centre to city centre connectivity between Sheffield and Leeds and Sheffield and Manchester that is crucial to achieve the aims of Transport for the North.”
The plan backed by transport secretary Mr Grayling will see a southern spur off the main high speed line to provide a dedicated link towards the existing Midland Main Line south of Chesterfield, enabling high speed trains from London to serve Sheffield city centre and Chesterfield.
The main HS2 route will run west of the M1, east of Killamarsh, Norwood and Wales, passing Aston. It will cross the A57 on viaduct.
The route would then run adjacent to the M18 immediately west of Bramley and then descend into the valley across the River Dearne, passing between Conisbrough and Mexborough. It then heads north, running east of Barnburgh and Hickleton and between Thurnscoe and South Kirby.
Confirming the news in a document presented today, the Department for Transport stated: "The route in South Yorkshire will be the route consulted in 2016 which in part follows the M1 and M18, serves Sheffield City Centre via a spur from the HS2 line and includes provision for a northern junction allowing trains to run between Sheffield and Leeds city centres using HS2."
The Government says the route will be cheaper then the alternative route which had originally proposed, which would have gone via Meadowhall and had been favoured by Barnsley, Doncaster and Rotherham's politicians.
Reaction to the news has been split between Sheffield and the rest of South Yorkshire, with senior figures in Sheffield welcoming the announcement, and those in the rest of the county critical of the move.
Leader of the Liberal Democrats in Sheffield Coun Shaffaq Mohammed said: "Sheffield is united in its support for HS2 in the city centre. I hope that all South Yorkshire politicians will now get behind this plan which will help unlock the economic potential of Sheffield City Region."
Sheffield Business Improvement District, an organisation aiming to improve business environment in the town centre said the route will provide two trains an hour between Sheffield City Centre and London, and slash journey times between Sheffield and the South of England.
Diane Jarvis, Sheffield BID Manager said: “HS2 doesn’t just benefit the visitor economy. It is also vital to encourage businesses to invest in or relocate to Sheffield. A city centre location with good public realm and quality office space will attract inward investment from major employers who want to benefit from HS2 high speed stations, lower costs and fast access to the Capital.”
Doncaster North MP Ed Miliband, whose constituency includes the Mexborough which faces demolitions of homes, said: "Today's decision on HS2 is wrong and perverse. It flies in the face of evidence, logic, and above all, the economic needs of South Yorkshire.
"The Meadowhall route would be better for jobs, regeneration, journey times, connectivity and for tackling the inequalities we face.
"We now know that the consultation was 15:1 against the M18 route but it has been ignored.
"Chris Grayling has added insult to injury by failing to come to the House of Commons to justify his decision and trying to sneak out a written statement. I will be seeking to force him to come and explain himself tomorrow.
"While this decision is obviously a bitter blow, I will continue to explore all the ways to overturn this decision and work with residents to do that. I will do everything I can to get the best outcome for my constituents."
Transport Secretary Chris Grayling said: "We will now press ahead with building the line, while continuing to ensure affected communities get appropriate support and are treated with fairness, compassion and respect."