Aviation minister Baroness Vere confirmed the Department for Transport (DfT) will continue subsidising the route alongside the Department for the Economy in Northern Ireland, with both departments providing £1.1 million during 2023/24 to maintain the connection.
The route will continue to operate for at least another year until 31 March 2024 and enable up to 19 return flights every week.
Baroness Vere said: "Thousands of people and businesses depend on this crucial travel link, which is why we remain committed to securing the route.
"Our funding will maintain this vital connection between Derry/Londonderry and London, with 19 services operating every week for at least another year, supporting jobs, and providing a boost to Northern Ireland’s economy."
Funding has been secured using a Public Service Obligation (PSO), which allows government to protect air connectivity into London, with Loganair once again being selected to operate the route.
The funding of £1.1 million from the NI Department for the Economy is a ring-fenced allocation from the Northern Ireland Office specifically for this City of Derry airport PSO and which cannot be used in any other DfE policy area.