A new £370m mixed-use ‘village’ is to be built in Islington on the site of the former North London Sorting Centre, which has been operated by the Royal Mail since 1904.

Developer Sager Group is behind the plans for the 500,000sq ft (46,452sq m) mixed use Islington Square project, which will feature 170,000sq ft (15,794sq m) of retail and leisure space along with 356 residential units.

CZWG Architects assisted with the design, while Cushman & Wakefield will work alongside Orme Retail and Shelly Sandzer as letting agents for the retail and leisure aspect – which will include a selection of shops, cafes, restaurants, a health club and bespoke cinema.

Sager has owned the majority of the site for a number of years while it obtained detailed planning consents. It is now in advanced negotiations with a number of occupiers to take key elements of the scheme.

Sager’s construction programme is expected to take 24 months, with the plan enabling retailers to open for Christmas 2016.

“This transaction marks a major milestone in the development of Islington Square which will become a landmark retail and leisure destination and a welcome addition to this thriving area of London,” said CEO of Sager Group Giris Rabinovitch.

“It has been more than a decade since acquiring the original site and we are delighted that we have succeeded in bringing this project to life.”

Royal Mail is to relocate its Islington delivery office to a new site on nearby Eagle Wharf Road – expected to be operational by summer 2015 as part of the deal with Sager.