Lancaster City Council has granted planning permission for a £150m mixed-use regeneration scheme for Lancaster city centre.

The project, called Castle View, has been three years in the planning, and is led by London-based urban regeneration company Centros. The plans feature six public spaces, including a new park leading to Lancaster canal and a public piazza linked to a pedestrian shopping street. There will also be new canal-side restaurants and cafés.

Associate director of Centros, David Lewis, said: “The 10-acre site is quite unusual in that it slopes upwards from the existing city centre to a canal and includes two theatres and the city’s unique Musicians’ Co-operative.

"It has offered us the opportunity to create a mixed-use scheme featuring retail, residential and commercial uses while also fostering a vibrant cultural quarter.”

Centros has been working on the development's proposals with the council and Mitchell's of Lancaster. Centros' development team consists of 3DReid Architecture and landscape designers Hyland Edgar Driver, as well as consultants Montagu Evans, Mayer Brown and Waterman Group.

As well as 320,000sqft of retail space and 179 town houses, the plans include major improvements to both the Dukes and the Grand theatres, as well as the creation of new premises for the Musicians' Co-operative.

Lewis added: “Lancaster is a very attractive Georgian stone city with many visitor attractions, however, its retail offer significantly lags behind its contemporaries.

“Retail demand is strong, with retailers often complaining that they can not find suitable units in the historic centre. This scheme will modernise Lancaster’s retail offer whilst protecting and enhancing its heritage.”

All of the listed buildings on the site will be retained and enhanced, with those that have fallen derelict being completely restored and brought back to active use.

It is expected that construction work on the site will begin 2010-11, and be completed in 2012-13.