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A new £21m arts complex in Southampton has moved forward after all the parties involved signed final legal agreements.

The city council has been awarded £7.2m from Arts Council England (ACE) to build a new cultural complex.

The project, on the site of the former Tyrrell and Green building in Guildhall Square, was due to be completed in 2008 but was hit by the recession.

Developer Grosvenor, the city council and ACE have signed agreements with detailed plans now to be drawn up.

It is hoped a planning application will be submitted next spring with work to start in 2012.

The proposal also includes restaurants and flats.

The arts complex will form part of the cultural quarter in Southampton, alongside the Sea City Museum, which is set to open in 2012.

Councillor John Hannides said: "It will be a place where all the arts can thrive and will draw in tens of thousands of visitors every year.

"It is great news that the final agreements have been put in place to make this aspiration a firm reality."

The scheme was originally offered £5.7m from ACE, but will now receive an extra £1.5m to support changes, including the redesign and relocation of the gallery.

Demolition work to clear the site has been completed.

The city council believes the complex create about 300 jobs.