Yes, it is a significant update.
I'm not sure what games you play, but you may wish to consider an even better card than that.
I know it will likely be $300 but the GTX660Ti is supposed to be out in the next two months and it's going to be an amazing value.
It also depends on the games you play.
I had an HD5870 which is very similar to an HD6870 and it played Skyrim (without the HD texture pack) at 1920x1080, high quality 60FPS.
1) seriously consider spending $300 on a GTX660Ti or similar HD7xxx card
2) compare benchmarks
3) get a non-reference cooler (whatever card you get) for lower noise
4) quality brand and read customer reviews on THE EXACT CARD YOU BUY
This is way BEYOND YOUR BUDGET likely but I think it's worth reading as there's a lot of good info:
Asus GTX670 DirectCU II: http://www.techpowerup.com/reviews/ASUS/GeForce_GTX_670_Direct_Cu_II/