The 50-year-old, who has been in interim charge since February, has been handed a 12-month contract along with assistant Colin Cooper.
Joint-chairmen Julian Rhodes and Mark Lawn made the offer to Jackson just minutes after agreeing a deal to buy the office block that stands next to Valley Parade from previous owner Prupim.
The purchase of the office block for a seven-figure sum by Lawn, Rhodes and fellow shareholder Professor David Rhodes had banished fears that City might be forced to quit their home of more than a century and move to Odsal.
It also provided the stability to finally offer Jackson the chance to lead his home-town club on a permanent basis.
Julian Rhodes said last night: “Peter deserves the opportunity to manage Bradford City. He has really impressed both Mark and myself during what has been a difficult time.
“Let’s not beat about the bush, we had a poor squad this season and the club was heading for relegation when Peter came in. Thankfully, he managed to get the best out of a poor squad to keep us up. And he managed it relatively comfortably as well.
“His application, endeavour and enthusiasm lifted the place when it really needed a lift. He always came into work with a smile on his face and, as a board, we were able to question certain things and not worry about his reaction.
“Some managers can be precious but he definitely isn’t. As a result, our working relationship has been good. He understood we couldn’t make a decision until the rent problems were eased and he accepted that. Then, as soon as it was done last Friday, within 15 minutes we had called Peter in and offered him the job.”
Jackson’s appointment follows the easing of City’s crippling rent bill by the purchase of the block that houses both the club’s ticket office and the Bantams Business Centre.
Under the terms of the old deal, landlords Prupim were paid around £370,000 per annum – as was the landlord of Valley Parade, Flamingo Land Limited Self Administered Pension Scheme. Bradford still hope to agree a rent reduction with the owner of their home ground.
Rhodes, who together with his father David and Lawn set up a new parent company, BC Bantams Limited, to purchase the office block, said: “We didn’t want to do the deal but there was no alternative.
“Without it, the club would have been facing insolvency. This way, the club’s overheads are significantly reduced.
“In terms of rent, obviously we would like to have some coming in but, basically, Bradford City will only pay what it can afford.”
Rhodes, who had to borrow money against his own house to help fund the purchase as Lawn took out an overdraft, added: “The main thing is it means Bradford City will be at Valley Parade next season.
“We can also start selling season tickets again now that the uncertainty has been removed and improve our cashflow.”
For Jackson, the significance of the sale of the office block meant his own position as manager could be confirmed.
He said: “It has probably been the longest job interview in football history and I am obviously delighted. But now the hard work starts.
“This club can’t go any lower than it did last season. There is no way Bradford City should be near the bottom of the Football League. I am not setting a target in terms of league position but I want to see big improvements.
“The challenge is a huge one for Colin (Cooper) and myself as we look to build a squad capable of competing at the top end of the division.
“It won’t be easy, as there are some strong teams coming up and down into League Two. But we are ready to take on the challenge of turning this club around.”
Jackson, who released 10 players at the end of last season and invited offers for the rest, has already spoken to several transfer targets ahead of them becoming free agents at the end of next month.
“Now I have been appointed, I will follow up that interest. I am determined to build a squad that wants to play for Bradford City and will do so with pride.”
Bantams looking to the future: Page 22.