East London's acclaimed Arcola Theatre is planning to relocate to a brand new eco-friendly 'arts campus' constructed entirely from sustainable materials, primarily straw bales.

According the The Stage, a plot of land near Dalston Junction station has been earmarked as the site, and the hope is to have the first stage of development finished in time for the 2012 Olympics. When completed, it will include a 300-seat auditorium, a separate complex containing four studio spaces and an additional space named the Launch Pad, for “eco-focused and entertainment events”.

Other additions include an environmentally-friendly gym, healthy living centre and a learning and skills suite. The complex will be constructed using the 'straw bale method', in which either specially-built bales or a mixture of mud and straw act as filler inside a metal or timber frame.

Speaking to The Stage, Arcola chief executive Ben Todd said: “The general problem we have is that the artistic programme does not fit into studio one anymore - the scale of shows we are doing just don’t fit and don’t pay … To explain to people which train station to go to and then walk through this dirty market on to a dodgy side street, and the shabby looking facade is the Arcola, it doesn’t really work. We need an iconic building.

“Often you will find that organisations like the Arcola will develop to a certain point, where ten or 20 years in, they have a board and call in architects and ask for a shiny new building. Everybody then harks on about how it has lost some of its character and soul. But this will be built by the Arcola, in the Arcola way.”

Hackney Council will meet in September to decide whether to grant the Arcola a four year occupancy of the site, and the venue is considering erecting a temporary 'Latitude festival-style' tented home to host productions during the construction period.

The Arcola vowed in 2007 to become "the world's first carbon-neutral theatre".