The 14,498km route will start in March 2018 but seats will go on sale in April next year, with up to 236 passengers on each flight.
The deal was finally struck following lengthy negotiations between the airline and Perth Airport, with the state government also contributing $14 million for the construction of quarantine, immigration and customs infrastructure.
Qantas chief executive Alan Joyce described the announcement as seismic and said it would be the third-longest passenger flight in the world.
"In 1947, Qantas created the kangaroo route. Back then it was four days and nine stops to get from Australia to London," he told reporters on Sunday.
"Now, with this amazing 787 we'll get you there in 17 hours with no stops."
The new flight will operate through Qantas' existing Terminals 2 and 3, and Qantas has agreed to move to an expanded Terminal 1 in 2025, pending a commercial agreement.
In time, Mr Joyce said he expected the flight to open up the potential for direct routes to and from other European cities, including Paris and Frankfurt.
Premier Colin Barnett, who is also the tourism minister, described the deal as a game-changer with the potential to inject more than $36 million a year into the local economy.
"The service will create opportunities for people to stop over in Perth for a day or two if en route to or from another Australian destination," he said.
"With Perth's large UK expat population, direct flights are anticipated to drive increased visitation from visiting friends and relatives."
Mr Joyce conceded it had been a tough negotiation with Perth Airport, but said they had finally reached a mutually acceptable agreement thanks to the premier's mediation.
"Without his involvement and his dialogue with both parties I don't think this would have been where it is today, and the state contribution has made this possible," he said.
Perth Airport chief executive Kevin Brown said the agreement ensured the customer experience at the airport was not diminished, particularly for the 4.3 million passengers going through the existing Terminal 1 every year.
WA Chamber of Commerce and Industry chief executive Deidre Willmott said the direct service would have positive flow-on effects for the rest of the economy, particularly in retail and hospitality, while the infrastructure upgrades were also likely to create more jobs.
Opposition leader Mark McGowan also welcomed the move but said state government financial contribution should be kept to a minimum.
Source: AAP
