The new Liverpool Arena and Convention Centre has been given the final go-ahead.

Building work will start next month on construction of the state-of-the-art waterside complex. This milestone marks the completion of detailed legal agreements, and is the culmination of work by project partners Liverpool City Council, Liverpool Vision, English Partnerships, and Northwest Regional Development Agency (NWDA) to bring forward the development of the key site.

The Lib Dem council has appointed Bovis Lend Lease to build the 'civic facilities'- the arena and convention centre- at Kings Waterfront.

Liberal Democrat City Council Leader Mike Storey said: "This is great news for Liverpool. It's been a long and complicated journey, but I'm delighted that our dream for a world class arena on the waterfront is now becoming a reality.

"The building blocks are all in place, and I'm looking forward to work starting on a facility that the region has needed for a long time. It will be one of the centrepieces of our celebration in 2008 and the years beyond."

The project is being funded from four sources: European Union Objective One (£50 million), English Partnerships (£67 million), Northwest Regional Development Agency (£15 million), and Liverpool City Council (£11 million).

Infrastructure work on the 14.6 hectare site started in June, but completion of the latest contract agreement enables the main contract can now go ahead.

The council has agreed a 'fixed cost' contract with contractor Bovis Lend Lease, which protects city council taxpayers.

Bovis Lend Lease will be responsible for the majority of risks in building the project - including inflationary costs, adverse ground conditions, performance of subcontractors, delays caused by poor weather and labour and materials shortages.

The Liverpool Arena and Convention Centre will include a 9,500 capacity arena, an auditorium with a capacity of 1,350, a multi-purpose hall of 3,600 sq metres, total exhibition space of 7,000 sq metres and 18 additional meeting rooms. It will be supported by a 1,600 space multi-storey car park, and a public piazza where outdoor events can be held. An adjoining hotel development - privately funded - will cater for business and leisure visitors.