Developer St Modwen has been given the go-ahead for a £1bn urban community development on the site of the former Llanwern steelworks near Newport, South Wales.

The company has secured a section 106 agreement with Newport City Council to progress the Glan Llyn project, having already acquired the 600-acre (242.8-hectare) site from Corus in 2004. Full planning permission has already been obtained to ensure large-scale land remediation work is carried out in preparation for the development, which is set to include around 4,000 new homes.

A number of retail and leisure facilities - including sports, amenity and play space, parks and lakes - are planned for the Llanwern site, along with schools, a library and a doctor's surgery. Rob Skelston, development director for St Modwen in South Wales, said: "Signing the agreement with Newport City Council signals an important milestone for the development of the site, meaning we can now start physical building work on the first residential phase of housing and also Celtic Business Park."

Welsh deputy First Minister Ieuan Wyn Jones added: "While the Corus mills at Llanwern are still a significant employer in the area and remain integral to its Welsh operations, the development of the heavy end of the steelworks which closed in 2001 is an important step in the regeneration of the area."