Geelong Mayor Keith Fagg says it is a major step forward to have a national agency based in regional Victoria
The national disability care scheme will be based in Geelong, creating about 300 jobs in the Victorian city hit by Ford's planned closure.
Prime minister Julia Gillard named Geelong as the headquarters for DisabilityCare Australia, the agency in charge of the national disability insurance scheme, on Monday.
"Our nation for too long has not embraced into our national life people with disabilities," Gillard said.
"We've allowed them to struggle with underfunded and fragmented services. We as a nation have determined we are going to change that."
Geelong Mayor Keith Fagg said it was a major step forward to have a national agency based in regional Victoria.
"We are both humbled and proud to be entrusted by the nation with this most significant community service," he said.
Fagg said DisabilityCare would create jobs for both local people and those wishing to move to Geelong from other parts of Australia.
"I would hope that local people would be employed, maybe people from Melbourne might come down and we will see more people employed in Geelong."
The NDIS announcement came after Ford revealed it would cut 510 jobs in Geelong when it ends manufacturing in Australia in three years.
Victorian premier Denis Napthine said Geelong was at the forefront of disability services and was the right home for the national scheme's headquarters.
"This is a day of great joy for Geelong and I think Australia," he said.
The launch site, employing 120 people, will begin in July, with about 5000 people in the Barwon region able to access care and support.
Opposition leader Tony Abbott said the coalition supported the choice of Geelong as headquarters.
"Locating the NDIS headquarters in Geelong will provide an important boost to the local economy and deliver exciting new opportunities for the workforce right across the region," he said.
"We support the sensible location of facilities in regional areas where it may help those regions and contribute to good public administration."
Tina Gulino, 44, of Geelong, was born with cerebral palsy.
She said having the headquarters in her hometown would help her access services and live with dignity.
"It's been a lifetime struggle," she said.
"We ... never thought we would see it occur in our lifetime."