The Government bought the Callaghan Square site from developer MEPC for £7.2m earlier this year.

It is now pressing ahead with building plans to create a business district at the central city site and will commission a second building when the project is completed.

Balfour Beatty will now go-ahead and design and build the first 90,000 sq ft office scheme on the land.

Cardiff Council had been in negotiations with the Welsh Government to use the Callaghan Square site to build a new council headquarters, a convention centre, and an indoor arena.

But with the office scheme proposal now going ahead, it looks like the council will have to find another location for their head offices and new public facilities.

Last year the the Welsh Government also acquired an under construction 80,000 sq ft building at the nearby Capital Quarter scheme owned by local developer JR Smart. On completion is Smart is contracted to build another office scheme of similar size.