The Enquirer revealed in May that rival Mace had conceded defeat in the race to build the 36-storey tower at Milton Court near the Barbican for developer Heron International.

Brookfield and Skanska were also interested in the scheme but it developed into a two-horse race between McAlpine and Mace in the final stages.

Industry sources claimed McAlpine’s bid had come in almost 10% below Mace’s price.

Work on site will now start this week with completion due in 2013.

The Heron will be a slender 36-storey tower providing luxury living space in the Square Mile.

In addition to 284 highly specified suites, apartments and penthouses, the development will incorporate a landscaped roof garden, a residents’ club lounge, gym, screening room, and valet parking.

The lower floors of The Heron will provide a new home for the Guildhall School of Music & Drama.

Lisa Ronson, Commercial Director of Heron International, said: “The Heron will offer residents a rare opportunity to live in the Square Mile, in apartments that will redefine City living.

“We look forward to working with Sir Robert McAlpine Ltd to bring this exclusive development to life, ensuring that the quality of the build and finish is as exceptional as the building’s unique location.”

Vince Corrigan, Regional Director of Sir Robert McAlpine Ltd, added: “Sir Robert McAlpine Ltd is delighted to be working with Heron International on this exciting and prestigious project.”