Sports Minister Tracey Crouch said the government would assess the final proposal from Birmingham before deciding whether a formal bid will be submitted to Games officials.
"We need to be completely satisfied that the bid offers overall value for money from hosting the Games and that a strong economic and sporting legacy can be delivered from it," she said in a statement.
"If we are to bid and are selected ...I have no doubt that Birmingham would host an excellent sporting spectacle."
Birmingham’s bid was considered particularly strong on its management of risk, the city's existing venue infrastructure and plans for a long term sporting legacy.
Liverpool's elected mayor Joe Anderson congratulated Birmingham and wished the city luck in a message on Twitter.
The 2022 Games were originally handed to Durban in South Africa but the city was stripped of hosting rights by the Commonwealth Games Federation in March after the plan hit financial problems.
Durban would have been the first African city to host the Games, which every four years bring together athletes from the 52 members of the Commonwealth, most of which were at one time colonies of Britain.
The Commonwealth Games Federation (CGF) said in April that Australia, Canada, Malaysia and Britain had submitted expressions of interest for the 2022 Games. The CGF Executive Board will make the final decision.
Birmingham's main rivals are seen as Victoria in western Canada and the Malaysian capital Kuala Lumpur. Perth and Melbourne in Australia have also expressed interest.
The 2018 Games will be held on Australia's Gold Coast.
(Reporting by Alan Baldwin, editing by John Stonestreet)
