BOA officials claim that it would recognise the once-in-a-generation opportunity to transform Olympic sport in Britain that results from competing in front of a home audience.
Colin Moynihan, the chairman of the BOA, said: "There is no greater sporting event in the world than the Olympic Games and, as the host nation, we know that the selection of the athletes who will have the honour of representing Team GB will be of great interest to the British public.
"We won’t be taking any passengers with us and we will set exacting standards that ensure the athletes who represent Team GB are truly the Best of British."
The announcement of the team’s size was made at a meeting of the National Olympic Committee, which also took the first steps in deciding the selection criteria that athletes will have to face.
Details of international qualification standards for each sport are expected to be released before the summer by the International Olympic Committee (IOC) and the International Federations of the 26 sports that will make up London 2012.
Shortly after that, the BOA, in consultation with the National Governing Bodies of sports and athletes, will announce its own set of qualification criteria.
The process is expected to be complete before the end of 2010, giving both sports and athletes transparency about what they have to do to qualify to represent Great Britain in the 2012 Olympic Games.
Britain selected a team of 676 for the 1908 Olympics when they finished top of the medals table for the only time in Olympic history, winning a total of 146 medals, 56 of them gold.
The last time the Games were held in London in 1948 Britain picked a squad of 375 athletes who won 23 medals, 12 of them gold, to finish 12th in the medals table.
A total of 311 athletes represented Britain in Beijing and the 47 medals won, including 19 gold, for fourth overall was the best performance since 1908.
The BOA hopes to compete at every sport in London 2012 and the size of the team will be swelled by the number of competitors in team sports in which Britain have not recently competed in, including football, handball, volleyball and water polo.
Andy Hunt, the chief executive of the BOA, said: "This is an important step on the road to 2012.
"It’s over a hundred years since we sent a team of this size to an Olympic Games and the sporting world looked very different in 1908.
"The challenge we’re setting for British Olympic sport is to match our own ambitions - this is a once in a generation opportunity for us all and we want to produce the performances that will inspire our country and reflect the ideals of the Olympic Movement."
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photos Janos Schmidt