Theatre and film lovers have reason to rejoice at the news that a major new cultural facility is being built in a key regeneration area in Manchester city centre, unlocking up to 10,000 jobs.

Two unique Manchester creative organisations, Cornerhouse and Library Theatre Company, will join forces in a stunning purpose-built £19 million new home on the northern side of First Street.

This new cultural destination will act as a powerful catalyst to the regeneration of the 20-acre First Street site and its neighbourhood, bringing the area to life through by increased footfall, attracting other leisure and retail investment and giving it a strong sense of place which it currently lacks.

These changes will help stimulate the development of around 1.25 million sq ft of commercial floorspace which will be critical to meeting growing occupier demand as Manchester’s economy recovers from the economic downturn.

Sir Richard Leese, Leader of Manchester City Council, said: “These highly imaginative proposals will be a win-win for Manchester. They support existing jobs and will help attract others to this important gateway site. In the aftermath of the recession and facing unprecedented public sector cuts this is exactly the sort of scheme we need to get people into work, get our economy moving even faster, and show the world that Manchester is still an ambitious city still on the up.”

The building will boast up to five cinemas, 600 sq m of contemporary gallery space, a 500-seat theatre and smaller studio/education space and an outdoor performance space as well as an impressive café and state-of-the-art back of house facilities. It will enable Cornerhouse and the Library Theatre Company to work collaboratively, creating a major cross-artform production centre and cultural hub.

Councillor Mike Amesbury, Executive Member for Culture and Leisure, said: “Manchester is committed to culture, something we see not as a luxury but as a necessity which creates jobs and other opportunities and is a fundamental part of attracting investors to our city, as well as being an inspiring end in itself.

“These are extraordinarily exciting proposals which will unlock the regeneration of an important part of the city centre as well as creating a world-class new cultural attraction.

“At a time when the arts world is experiencing many cuts, it’s fantastic that Manchester is leading the way by investing in our cultural economy.

“Combining the undoubted strengths and growing audiences of Cornerhouse and the Library Theatre Company will allow the two companies to expand and flourish.”

Cornerhouse is constrained by its current buildings which are unsuitable for it to expand. The new cultural facility will provide Cornerhouse with much-needed expansion and improvement within an advanced timeframe and a unique platform for the growth of its contemporary visual art and cinema programmes.

The Library Theatre Company had also outgrown its previous home in the basement of the Central Library and its new home will enable it to realise its vision of becoming a major centre for the production and promotion of contemporary theatre outside London as well as expanding its educational work.

The £19 million scheme is fully-funded from the £16 million already earmarked from the Library Theatre relocation with the remaining £3 million ultimately coming from third party contributions and future capital receipts.

Dave Moutrey, director and chief executive of Cornerhouse, said: “This is a fantastic opportunity to create a unique, audience-focused centre for the arts and we are thrilled to be at the heart of it. The news facility will give us space to grow, to increase our audience and widen access to contemporary visual art and cinema. We’ll be able to create more opportunities for community involvement and to expand our role as a digitally connected producer.

“We’re looking forward to collaborating with the Library Theatre Company to make the best use of our skills and resources to develop a financially sustainable artistic and social hub that secures Manchester’s position as a leading destination on the UK’s cultural map.”

Chris Horner, Artistic Director of the Library Theatre Company, said: "This is terrific news for Manchester audiences and the Library Theatre Company. It will enable the company to develop and expand its work and achieve its aspirations. The artistic potential of the collaboration with Cornerhouse is immense."

It is anticipated that the new facility will open in spring 2014. The Library Theatre Company currently stages productions at the Lowry and other Northwest Venues.