The Shetland Arts Development Agency (SADA) is set to begin construction on its new £12m music, cinema and arts venue on the Shetland Islands in three weeks.

The Mareel centre, on track to open in 2010, will be situated on Lerwick's waterfront, has been designed to drive Scotland's burgeoning cultural and economic development forward. Although the development is led by SADA, the Shetland Islands Council and a stakeholder group consisting of over 100 local musicians and artists have had a hand in the project. Designed by Gareth Hoskins Architects, the facility will comprise a 330-seat auditorium, which will be able to accommodate 700 people for a standing concert. A 159-seat digital cinema, rehearsal space for music, dance and drama, a recording studio and a cafe bar are also included. DITT Construction will be fabricating the project.

SADA has secured £2.8m from the European Regional Development Fund (ERDF), which helped enable it to purchase the land last week. There has also been considerable investment from the Scottish Arts Council Lottery Fund (£2.12m), the council (£5.19m), and both Highlands and Islands Enterprise and Shetland Development Trust (£965,000), as well as a further £50,000 from The Gannochy Trust. Gwilym Gibbons, director of SADA, said: "Mareel will provide a creative hub and focus for our creative community, and Shetland as a whole will benefit from a unique, state-of-the-art facility.

"Mareel will enhance lives and enable those visiting, living and returning to our islands to have a place to develop new skills and fulfil their creative potential and ambitions." SADA has outlined a 10-year vision for the venue, which will see it become a regular venue on touring schedules of prominent musical and performing artists.