OAKLAND  (AP) — Oakland officials have approved a $1 billion deal to transform a former U.S. Army base into a state-of-the-art distribution center that's expected to create thousands of jobs.

With a 7-0 vote Tuesday, the city council approved a series of agreements with developers to transform 130 acres of the former base into a shipping, packaging and warehousing complex next to the Port of Oakland.

The council just beat a Tuesday deadline to keep a $242 million state grant. The council still needs to approve a second reading of the deal next week.

"We have a project that may not be perfect, but it is moving forward," said Councilwoman Jane Brunner. "And we have spent 12 years not getting something done on the army base."

The city's largest development in decades is expected to create 2,800 construction jobs and another 2,000 permanent jobs. Construction is set to begin in 2012.

The project's $484 million first phase overcame various hurdles over the past four years, and the approval had been delayed because developers and city officials couldn't agree on how many jobs should go to locals.

Under the newly approved agreements, half of the construction jobs will be set aside for city residents. Businesses housed at the new complex will be required to give 50 percent of the permanent jobs to Oakland residents unless they have fewer than have 40 employees.

The 366-acre Oakland Army Base was closed in 1999 after serving as a key distribution center for overseas military operations, from World War II to the Gulf War.

The current developers, Prologis and California Capital and Investment Group, stepped forward with the "Working Waterfront" plan in 2008 after a series of other proposals, ranging from a movie studio to a tribal casino, didn't pan out.

The former Oakland Army Base is one of dozens of former military bases nationwide that were closed over the past two decades and are now being redeveloped for civilian uses.