The 1.2m sq ft site will include a huge office complex, and research and development facilities. The search giant will pay an initial base rent of $3.66m a year for the undeveloped land at the Nasa Ames Research Centre in Mountain View.

Google says it needs the space for the thousands of workers it expects to hire as the company expands its business. "This long-term lease agreement is a key component of Google's strategy for continued growth in Silicon Valley," says David Radcliffe, Google's vice-president of real estate and workplace services. In the last four years, Google has added more than 17,000 employees to boost its payroll to 19, 156 workers.

This workforce expansion has spurred the company to lease or buy many of the smaller offices circling its Googleplex headquarters, a 1 million sq ft campus that Google bought for $139m two years ago.

The deal is being seen as a win-win situation for Nasa as it endeavours to establish itself as a high-tech centre of excellence "With this new campus, we will establish an era of expanded collaboration with Google that will further enhance our Silicon Valley connections," says Ames director S. Pete Worden.

"This major expansion of Nasa Research Park supports Nasa's mission to lead the nation in space exploration, scientific discovery and aeronautics research."

Nasa will use the money for improvements and maintenance costs at the Research Park.
Mr Radcliffe agrees the agreement will enhance Nasa's reputation and allow the company to draw on the brain power that will be available on its new doorstep. "We believe this collaboration between Google, Nasa and the city of Mountain View is emblematic of the mutually beneficial partnerships that can be created between the public and private sectors. "

Google has not said how much it will cost to build the new campus, which is also expected to include housing for employees, sports, conference, dining and child care facilities and perhaps some retail outlets. Building work is expected to get under way no later than 2013 with the final phase of work starting in 2022. After the 40-year lease expires, the agreement could be extended by as much as 50 more years.

The real estate deal is being seen as further evidence of Google and Nasa becoming closer. The relationship between the two caused something of a backlash last year when company co-founders Larry Page and Sergey Brin negotiated an unusual deal to take off, land and park their private jet at a government managed airport near where the new offices will be built.

Moffett Federal Airfield has been off-limits to most private plans, but Mr Brin and Mr Page got around that restriction by agreeing to pay Nasa $1.3m a year and making a commitment to fly the space agency's equipment on research missions.