Virginia created two military reserves, one on each side of the Ohio River
Source: Atlas of the Historical Geography of the United States, Military Reserves, 1778-1816, With Dates of Creation (Plate 45b, digitized by University of Richmond)
In 1781, Virginia offered to relinquish its claims to lands northwest of the Ohio River to the Continental Congress. That cession acknowledged the impossibility of governing territory located so far away from Richmond, reduced concerns of other states that an oversized Virginia could dominate the coalition that had united to fight the British, blocked efforts of various land companies to establish private claims in the area, and eliminated Maryland's last excuse for not ratifying the Articles of Confederation.
The cession of the northwestern part of the state was contingent upon the Continental Congress guaranteeing Virginia's borders, including the state's right to the Kentucky lands. Congress finally accepted a revised offer from Virginia in 1784, tacitly confirming Virginia's western boundary along the Ohio River and including Kentucky.
In the Virginia Land Law of May 3, 1779, the General Assembly reserved lands near the Green River in what later became the state of Kentucky.1
Virginia created a military district in 1779, before Kentucky became an independent state in 1792
Source: Kentucky Secretary of State, Virginia's Western Counties 1780
As the Revolutionary War continued and more soldiers were promised land grants, Virginia officials became concerned that the military district on the Green River might be too small.
In the original 1781 offer and the final 1784 deal, Virginia retained rights to 4.2 million acres of land in what became the Northwest Territory. The state had promised land grants to soldiers willing to enlist in the Continental Army. The terms of the 1784 cession of the Northwest Territory ensured that Virginia would have enough land between the Scioto and Little Miami rivers, north of the Ohio River, to satisfy all soldiers making claims.
The 4.2 million acres in the Northwest Territory were organized as the Virginia Military District.
the Virginia Military District in Ohio was located between the Scioto and Little Miami rivers
Source: Ohio Lands and Their Subdivision, General Subdivisions of Land in Ohio (p.78)
the Virginia Land Law of 1779 created a military district in Kentucky
Source: Kentucky Secretary of State, Virginia's Military District in Kentucky
Virginia retained land for fulfilling grants to its military veterans, when ceding the Northwest Territory to the Continental Congress
Source: Perry-Castaņeda Library Map Collection, The United States, 1783-1803 ("Historical Atlas" by William R. Shepherd, 1923)