NEWPORT university's multi-million pound city centre campus was given the go ahead last night after a £10 million funding package was agreed. University governors were told the city council and regeneration group Newport Unlimited will each give £5 million towards the first phase of the project.

That funding will match the £10 million pledged by the university for the £20 million development that will house the Newport School of Art, Media and Design on the banks of the River Usk in the city centre.

Detailed discussions on the legal agreement between the partners will now take place, but strict conditions for the funding are expected, including a guarantee of completion of all four phases by 2010.

Designs for the new 15,600 sq metre campus will be commissioned immediately.

Building work is set to start early next year, with students expected to be using it by autumn 2009.

It is the first phase of the university's £50 million development. University of Wales, Newport's vice-chancellor, Professor James Lusty, said the new campus would be an important development for the city centre.

He said: "It will bring learning back into the heart of the city and provide a significant boost for the regeneration of Newport."

The proposed site is on the banks of the River Usk close to the Riverfront arts centre and the proposed new footbridge. The land is being donated to the university by the council under the terms of a long lease.

Newport council leader councillor Bob Bright said: "By bringing the university back into the city centre, we will be bringing jobs, a lively art culture and provide well-educated graduates for the future growth of Newport."

The announcement is a further boost for education in Newport. Earlier this year Coleg Gwent announced it will build a new city centre campus as part of a £110 million revamp of its Gwent sites.