Airline Flybe has announced it will keep its Newquay-to-Gatwick service going until next October.
The company had said it would be withdrawing from the route in March, claiming Gatwick landing charges were excessive.
Now a deal struck with Newquay Airport could give Cornwall Council time to arrange a public subsidy that would guarantee the route longer-term.
Flybe has secured new slots, allowing its 78-seat planes to continue to fly from the town twice daily.
The Government confirmed last month that the air link to the capital is eligible for a state-funded subsidy. But that process was not likely to be complete until autumn 2014, leaving a break during the summer and raising huge concerns over the economic impact on the far South West.
Now flights will continue morning and evening right through the summer season until a new service is put in place.
Paul Simmons, Flybe's chief commercial officer, said: "Flybe has been working hard with Newquay Cornwall Airport over the past couple of months to try and secure a satisfactory resolution for Cornwall to retain a crucial lifeline air link to and from London.
"This is critical both for leisure and business travellers who also need the security of a schedule that allows the opportunity for convenient day returns. "
Mr Simmons added that Flybe would soon be announcing details of a new summer route between Newquay and Birmingham.
Al Titterington, managing director of Newquay Cornwall Airport, said he was "extremely pleased" and welcomed the new Birmingham route, which he said "illustrates the airport's development strategy of connecting Cornwall with major business centres in the UK".
EasyJet, which has bought the landing slots at Gatwick from Flybe and operates seasonal flights to Southend from Newquay, had previously said there was "insufficient demand" to maintain the London link.
But then the Department for Transport (DfT) stepped in and confirmed the route is eligible for a public service obligation (PSO) – which could mean several million pounds a year to underwrite the unprofitable link.
Once the DfT has formally notified the European Commission, Cornwall Council can issue a tender document for airlines to submit bids to operate a service.
Liberal Democrat MP for St Austell and Newquay, Stephen Gilbert, said: "This is great news but it doesn't mean that we are out of the woods yet – but this extension will be a great relief to businesses.
"In all of this we have to remember that the airport is about jobs and investment across Cornwall and we need to secure it for the long term."