The council had hoped to form the development joint venture with Lendlease before the end of last year for a start in 2022, but this has slipped.

The decision is a major milestone for a scheme which is one of the most significant development opportunities in the city and a key strand of plans to transform the centre.

The 17 ha new urban quarter at Smithfield will include a new home for Birmingham’s historic Bull Ring Markets, leisure and cultural facilities and more than 2,000 homes around a new public square.

The redevelopment of the area, which is twice the size of Brindleyplace, is expected to take 15 years to complete.

Indicative plan of redeveloped Smithfield quarter

Councillor Ian Ward, Leader of Birmingham City Council said: “This £1.9bn development will be a major boost for the city as a whole: Birmingham Smithfield will become a shining example of inclusive economic growth and will create a real legacy in the heart of Birmingham.”

Once a contract has been finalised and approved by both parties, work on a planning application for the scheme will be able to begin.

Bek Seeley, Lendlease’s Managing Director for Development in Europe, said: “This is an important step forwards for a project that will provide remarkable opportunities for future generations of residents and businesses in Birmingham.

“A great deal of work has already been carried out to get the project to this stage and we’re looking forward to being able to share ideas and collaborate with the wider community next year to bring to life this fantastic centre piece for Birmingham’s future.”