It is a huge commitment for the Canadian town, which has slightly over 80,000 residents, because they have promised to cover up to $21 million (£13.5 million/€16.4 million) of velodrome building costs.

The velodrome facility is set to be built alongside a planned Education Village, which is a proposed new satellite campus for Wilfrid Laurier University.

The news is also a major boost for Toronto 2015, who have been searching desperately for a location for the velodrome over the past six months.

"On behalf of Toronto 2015, we would like to thank the town of Milton for making this velodrome a reality," said Toronto 2015 chief executive Ian Troop.

"This is the result of sound deliberation and an appreciation for the potential associated with a permanent velodrome.

"Toronto 2015 looks forward to working with town of Milton and the Organising Committee's partners to build a velodrome that will attract the best athletes from the Americas in 2015 and leave a lasting sport legacy."

The velodrome will become a legacy cycling centre after Toronto 2015 and will include an infield that could support other recreational activities such as basketball, volleyball or badminton.

"This is a great day for cycling and amateur sport in Canada," said Canadian racing cyclist Curt Harnett, who competed in four Olympic Games and won three medals.

"This will result in a world class facility that will make Milton a cycling hub for the surrounding community, the province and eastern Canada."

The Pan American Games are the world's second largest international multisport event behind the Olympic Games.

At Toronto 2015, around 8,000 athletes from 41 nations will compete across 37 sports, with the Pan American Games taking place from July 10 until 26 and the Parapan American Games from August 7 until 14.

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