Westminster Council has granted planning permission for Willmott Dixon to build a £60m mixed-use development, with £20m going towards new leisure facilities in west London’s Queen’s Park.

Under the deal, the construction firm will demolish two existing sites – Moberly and Jubilee sports centres – to make way for a new centre, expected to reduce annual operating costs by around £600,000 a year. It will feature a 25m six-lane swimming pool, a health and fitness suite, three exercise and dance studios, a boxing hall, eight-court sports hall and a café, as well as a smaller community sports facility and 156 new homes.

Richard Barker, Westminster Council’s director of sport and leisure, said: “This decision means that we can now build the new facilities which I hope will encourage more people in Queen’s Park to take up sporting activity, and help improve their health and their lives overall.”

Construction will begin at Moberly sports centre in Q3 of 2014, with work expected to be complete by 2016, before work begins on the community facility, which will include a three-court sports hall and flexible activity space.