More than 3,500 tax workers are set to move to a brand new home in Birmingham city centre.

HM Revenue and Customs has confirmed that its new West Midlands regional hub will be based at the Arena Central complex in Broad Street.

The Government department has signed a 25-year lease on the 14-storey, 3 Arena Central building where around 3,600 staff will be based from 2020.

Demolition and site clearance work is due to start imminently.

HMRC, which will count HSBC UK's new head office among its neighbours at Arena Central, is undergoing a major review of its estate which is expected to see its offices consolidated into 13 regional hubs across the country.

Staff from the Department for Work and Pensions will also be based at 3 Arena Central and the deal, at 240,000 sq ft, is said to be the largest pre-let in the city in a decade.

It was rumoured last year the department was poised to sign a deal for Three Snowhill off Colmore Row.

The move is part of the wider Government Hubs Programme which is aiming to reduce the number of isolated and under-used offices it has by co-locating departments in shared buildings.

Staff moving to hubs will need less space as they adopt smart working principles which will reduce their operating costs.

Search for West Midlands public sector jobs with Fish4Jobs

There were 19 HMRC offices in the West Midlands but six of these have already closed and a further 12 will shut by 2020/21.

A base in Telford, Shropshire, will be retained as a specialist site.

HMRC said it wanted to keep as many staff as possible and expected 90 per cent of its current workforce to either work in a regional centre or see out their careers in an HMRC office.

A spokesman added: "While HMRC's modelling shows the vast majority of its staff will be able to move, all staff will have a meeting with their manager about a year before the move to discuss their personal circumstances.

"It will be at this point that a clearer picture will emerge about an individual's ability to relocate.

HMRC will move to 3 Arena Central (centre of CGI) in 2020
HMRC will move to 3 Arena Central (centre of CGI) in 2020

"HMRC will do everything it can to support both its people in relocating to the regional centres and in trying to find alternative solutions for those that can't."

HMRC chief executive Jon Thompson said: "We're delighted to be part of the new UK Government Hub in 3 Arena Central.

"This is another step in HMRC's transformation into a modern, digitally advanced tax authority.

"It's the beginning of a process that will see our colleagues come together in state-of-the art facilities, enabling closer working relationships and increasing our effectiveness in collecting taxes.

"It will also make HMRC an important contributor to the economy and to communities in and around Birmingham."

Miller Developments is leading the regeneration project as part of joint venture ACDL.

Andrew Sutherland from the company said: "Following so closely behind the selection of 1 Centenary Square by HSBC as the home of its retail bank, this truly demonstrates the inward investment appeal of both Birmingham as a city and Arena Central specifically as a destination."

The development is being funded by Legal & General.

JLL and Eversheds acted for the Government in the completion of this deal, Pinsent Masons advised Arena Central Developments, and Savills and Squire Patton Boggs acted for Birmingham City Council.