The UK is to establish the world’s largest continuous marine reserve in waters around the Pitcairn Islands in the Pacific, the government has said.

While not mentioned in chancellor George Osborne’s speech, the budget published on Wednesday confirms that the government will go ahead with designating the ocean around Pitcairn – famous partly as the island where the mutineers of the Bounty settled – as a marine protected area (MPA).

The zone is expected to ban commercial fishing, and will cover a 834,000 sq km (322,000 square miles) area where previous expeditions have found more than 80 species of fish, coral and algae.

Conservationists had argued that modern satellite monitoring meant that costly boat patrols to stop overfishing made such a protected zone feasible and affordable, and the government in its budget statement appears to agree.

It said the MPA “will be dependent upon reaching agreement with NGOs on satellite monitoring and with authorities in relevant ports to prevent landing of illegal catch, as well as on identifying a practical naval method of enforcing the MPA at a cost that can be accommodated within existing departmental expenditure limits”.

Campaigners said they were delighted that the reserve would be designated.

Zac Goldsmith, a Conservative MP, who has called for the reserve’s creation along with celebrities including Hugh Fearnley-Whittingstall, Gillian Anderson, Julie Christie and Helena Bonham-Carter, said: “This is wonderful news and the chancellor deserves real credit for this. I very much hope it is just the start. Pitcairn is not our only large ocean territory, and we should be looking for similar opportunities elsewhere.”

He added: “What has happened in our oceans is a biodiversity tragedy, but it is a humanitarian issue too. Nearly a billion people depend on fish as their primary source of protein, and nearly a quarter of a billion depend on fish for their livelihoods.”

Jo Royle, of Pew’s Global Ocean Legacy, said: “With this designation, the United Kingdom raises the bar for protection of our ocean and sets a new standard for others to follow. The Pitcairn Islands Marine Reserve will build a refuge of untouched ocean to protect and conserve a wealth of marine life. We celebrate members of parliament for pressing for this action.”

The UK already has the world’s largest marine protected area, in the waters surrounding the Chagos archipelago in the Indian ocean. But Britain is facing a legal challenge against the reserve in the UN’s permanent court of arbitration in the Hague, which is expected to rule soon.