Defence Minister Lindiwe Sisulu will sign a memorandum of understanding with Eastern Cape premier Noxolo Kiviet on Monday.
Through the MOU, Bhisho will hand over the airport to the Defence Ministry to utilise for training and other military exercises, particularly by the South African Air Force.
In return, the Defence Ministry will help with the construction of a new runway in order to accommodate bigger aircraft at the airport.
The five year agreement forms part of the Mthatha Airport Upgrade Project, which is in line with Bhisho's Blue Skyway Aviation Strategy.
The strategy seeks to improve the potential of both the Bhisho and Mthatha Airports, as well as breathe new life into rural airstrips within the province.
Meanwhile, Defence Minister Sisulu tabled her budget vote in parliament on Thursday.
She provided the House with details of the SA National Defence Force's new dispensation which comes into effect over the next two financial years.
She told the National Assembly that soldiers' salaries would be adjusted to recognise years of service.
Sisulu also highlighted the responsibility that commanding officers will bear in terms of the new military dispensation.
