Sheffield may soon become home to a new leisure and retail quarter capable of rivalling the nearby cities of Manchester and Nottingham, after Sheffield Council announced plans to take a troubled shopping development into its own hands.

The council now plans to spend £55m purchasing a number of remaining properties between Pinstone Street, Moorhead and Barkers Pool in the city centre.

Some of the buildings in the area had already been purchased by developer Hammerson – which had planned a project known as the Sevenstone shopping scheme – though it failed to materialise because of lengthy delays, with the council ending ties with the business last year.

However, the council now plans to inject new life into the area with a revised New Retail Quarter project that could cost up to £300m to develop, while also creating 2,500 jobs in the process.

A number of developers have already shown an interest in the scheme, which would be developed on a block-by block basis, as opposed to a mall-style structure originally proposed in previous plans.

The council is currently finalising the details of the property deal, which could either see investment coming in from other parties, or the council producing funding for the purchases of its own accord.

It is believed a decision on the developer for the project is being planned for this autumn, while work could start in 2016, with a first-stage phase being completed by 2019.

“The New Retail Quarter is a key part of our vision to give Sheffield a high-class retail offer that can compete with Manchester, Leeds and Nottingham,” said councillor Ben Curran, cabinet member for Finance and Resources.

“This is a significant investment and emphasises the council’s determination to enable the New Retail Quarter to move forward.

“Once completed, the New Retail Quarter will help to improve the status of the city and stimulate future office, commercial and leisure opportunities in Sheffield city centre. This development will bring significant external investment into the city as well as giving a massive boost to the city centre’s retail offer.”