The company's top executives will move to Arlington, but Xe will keep its 7,000-acre training site in Moyock, N.C., the Washington Business Journal reported.
Chief executive Ted Wright said, "This move demonstrates our commitment to foster even stronger relationships with our customers in and around Washington."
USTC Holdings LLC acquired Blackwater last December and named a new board whose members include former U.S. Attorney John Ashcroft and former Clinton administration White House Counsel Jack Quinn.
The company has security training contracts with the Pentagon, State Department, foreign governments and law enforcement agencies.
2014: The Year in Music [PHOTOS]