The event is one of the highlights of the snooker calendar, featuring an elite field of the world's top 16 players. Ronnie O'Sullivan, Mark Selby, John Higgins and Ding Junhui have all won it in recent years.
It was previously held at Wembley Arena but The Masters is being given a new lease of life by moving to the world famous Alexandra Palace. The venue is much closer to central London - just ten minutes from King's Cross - and is renowned for staging top sporting events.
World Snooker Chairman Barry Hearn said: "The Alexandra Palace is an absolutely fantastic venue, as we've found by staging the World Darts Championship there. We've seen record ticket sales for the darts and I'm expecting to see the same for the snooker. When it's packed out, the atmosphere in the place is electric, and I can't wait to see snooker played under those conditions because that's what The Masters is all about.
"We're keeping the event in London but the players are going to experience something new and wonderful. There's a great team in place at Alexandra Palace and we look forward to working with them again."
Rebecca Kane, Managing Director of Alexandra Palace Trading Ltd, added: "We are so pleased that Ally Pally has been chosen as the new home for The Masters. We will be working closely with Barry Hearn and the World Snooker team to make this a Masters to remember.
"Alexandra Palace has a strong heritage in bringing live entertainment to the fans from a unique setting overlooking the whole of London, making us the perfect venue for music and sport.
"2012 will be a big year for all those working at the Palace and we are proud and honoured that the year will start in such spectacular fashion with The Masters at Ally Pally!"
Alexandra Palace has 1500 free car parking spaces, group travel facilities and simple access to both overground and underground stations. Full transport and facilities information can be found on the website www.alexandrapalace.com.
The tournament will run from January 15 to 22, 2012. It will be televised by BBC Sport, Eurosport and CCTV China, with a global reach of hundreds of millions.
Details of how to buy tickets will be announced shortly on www.worldsnooker.com
Ball by ball scoring and results from tournaments