The announcement comes three months after a Grenadian National Olympics Committee (GNOC) delegation spent a day touring the university's facilities.
The team also looked at the Stadium of Light, the home of Premier League Sunderland, Sunderland Aquatic Centre and other city sporting venues.
The event was organised by WINDREF (Windward Islands Research and Education Foundation) - the research institute at St George's University in Grenada, bringing together sporting and academic bodies with potential partners in the West Indies
Ivan Whitfield, director of sport at the University, says he hopes the Olympic training base offer is just the beginning of a longer term relationship with the GNOC and the Island of Grenada itself.
He said: "There has been a tremendous partnership effort between the University of Sunderland, Sunderland City Council and SAFC to make this happen, supported by One North East and other sporting facilities in the region. It is fair to say that without this team approach, we may have not been successful in attracting the Grenada athletes to Sunderland.
"We demonstrated that our joined up offer is second to none in a city environment, it's the whole package for the GNOC.
"Their decision links in to what our university can provide in terms of sports science, sport medicine, injury prevention and treatment, which our on-site service undoubtedly appealed to the committee."
The team will train at CitySpace (pictured) - a £12 million sports and social facility which opened in late 2009.
It features a six-badminton court sports hall, a 70-station fitness gym, sports massage and injuries centre, an indoor climbing wall, as well as social, catering, leisure and exhibition facilities.
Grenada made its debut in the Olympics at Los Angeles in 1984 and have competed in every Games since, although they are still waiting to win their first medal.
At Beijing they sent a team of nine, eight of whom competed in athletics with one taking part in boxing.
Royston La Hee, the GNOC President, said: "The facilities in Sunderland and at the university are excellent; I have been very impressed with what I have seen."
Leader of Sunderland City Council, Councillor Paul Watson, said: "We are delighted to be working in close partnership with University of Sunderland to welcome the Grenada Olympic team to use the city's facilities.
"Hopefully they can be used as a springboard to help the Grenada team achieve great things at the Olympics.
"It's fantastic news for the city that we will be playing a role in the Olympic Games in 2012."
February 2009: Cram spearheading Sunderland effort for London 2012