This review has a section dedicated to the issue; the precise mechanism seems to be unclear. There seems to be some agreement on the formation of a Co,V rich ordered gamma2 phase. The review's sources may shed some light on the issue.

http://www.thomas-sourmail.net/papers_html/FeCo_review/FeCo_review.pdf

[A]The experimental results indicate that V can by effectively used not only for precipitation strengthening but also for ferrite grain refinement. V contributes to the formation of two types of intragranulary nucleated ferrite;

polygonal (idiomorph) ferrite and acicular (sideplate) ferrite.

[B]Intragranular polygonal ferrite nucleates on VN particles which grow in austenite during isothermal holding or slow cooling throughout the austenite range.It forms in the narrow temperature range, between 650-600C for the investigated compositions.

[C]Acicular ferrite microstructure forms in V-microalloyed steels during isothermal transformation at lower temperatures (~450C). It is obtained in V-microalloyed steels containing high, medium or very low N levels. This suggests that V on its own can promote the formation of the acicular ferrite microstructure.

[D]V is an effective and easy controllable precipitation strengthening element. The degree of precipitation strengthening of ferrite for a given V content depends on the available quantities of C and N. It was confirmed that N is a very reliable alloying element, increasing the yield strength of V-microalloyed steels by some 6 MPa for every 0.001% N, essentially independent of processing conditions.

[E] It is demonstrated that the V(C,N)- precipitation becomes denser and finer with increasing N-content. C content, on the othe rhand, has usually been considered not relevant to precipitation strengthening when the precipitation occurs in ferrite because of the very small carbon content in solution in ferrite at equilibrium.

[F] Thepresent results have shown that the precipitation strengthening of V-microalloyed steels increases significantly with the total C-content, ~5.5MPa/0.01% C. The explanation is that the C-content of the steel delays the pearlite (ferrite+cementite) formation and thereby maintains the higher,metastable C-content in ferrite given by the austenite/ferrite equilibrium for a longer time. Thiseffect of C is particularly significant for medium carbon steels typically used for hot rolled bars and sections.

REFERENCE:

Pls.find an attachment.

Dear Manohar Sehgal,

Thanks for your comments

But I should tell you that stability condition of austenite in steels and FeCo alloys is different. Vanadium in steels is stabilizer of Ferrite, while, in FeCo alloy is stabilizer of austenite.

With Bests

Re: How does vanadium increase the stability of austenite phase in FeCo alloys? 

I think I found your answer. Here is a quote from the attached .pdf:

"Upon cooling to 980 °C, near equiatomic Fe-Co changes from a paramagnetic γ phase (fcc) to the ferromagnetic α phase (bcc). Below 730 °C, the α phase transforms to the ordered, α’ phase (B2 structure). The addition of 2% V serves to widen the two-phase α + γ region enough that α and γ are stable even down to room temperature.6 It also retards the kinetics of the ordering reaction below 730°C. This ordering transition occurs very rapidly in the equiatomic alloy, but the presence of V suppresses ordering during rapid quenching."

Dear A.U. Daniels,

Thanks for your comment.

With Bests

Saeed