The county were considering possible moves to either Eastlands in east Manchester or Wigan, but today's announcement means all their hopes for the future are once again founded in their traditional home base.
"No-one is more pleased to be staying here than me. Today's news is fabulous," Lancashire chairman Jack Simmons said
One person who could dispute that proud claim, though, is Lancashire's England all-rounder Andrew Flintoff - a fact acknowledged by Simmons.
"I know someone else who is delighted - and that is 'Freddie' Flintoff. He really wanted to stay here," said the chairman.
The decision to stay at Old Trafford, however, is still dependent on ratification from Trafford Borough Council, with whom the cricket club have an ongoing partnership.
The council's intention to move away from Trafford town hall, adjacent to the cricket ground, has been a catalyst for Lancashire's hopes of pressing on with the redevelopment of the ground - a project expected to cost in the region of 20 million pounds.