Nurton Developments has clinched what is believed to be the biggest office deal in central Birmingham this year - the letting of 42,000 sq ft of Grade A space at the £25 million refurbished Cannon House, at Colmore Circus, to a major government agency.

The Insolvency Service, part of the Department for Business Enterprise and Regulatory Reform (BERR), has taken levels three and four of the refurbished building.

It will use the new premises as its flagship Midlands headquarters when it relocates from nearby Ladywood House, in Stephenson Street, next spring.

Nurton's decision to commit to the extensive level of refurbishment last year was a prime factor in securing the letting, says Ashley Hancox of agents GSD.

"The Insolvency Service has been considering moving to new premises in central Birmingham and beyond for a long time and when it first visited an unrefurbished Cannon House about three years ago, felt it wasn't suitable. However, on the works were completed it was suitably impressed by the complete transformation.

"Nurton and the design team's strategy to create a building with a high specification and a new facade, which has a strong visual impact on the city's business district has really paid off."

Jon Carmalt, office agency partner at King Sturge, who acted on behalf of the Insolvency Service in the acquisition said: "Our search considered a wide range of office opportunities in the central Birmingham market.

"Our selection process carefully examined a number of factors that were identified as being highly important to the Insolvency Service.

"Following this process, Cannon House emerged as the clear choice for our client. Not only is it in a fantastic location for proximity to public transport, staff amenities and the courts, it is able to offer large efficient floor plates in a building which will have a low environmental impact and is excellent value for money for accommodation of this quality."

David Bradshaw, managing director at Nurton, added: "We are delighted that our scheme has enabled the Insolvency Service to commit its longer term future to Birmingham.

"We are very aware of the requirements of occupiers in Birmingham and have worked closely with Birmingham City Council to ensure that Cannon House is a striking and viable option that provides the office market with the accommodation it is looking for."

Ken Horan, head of property, services and procurement with the Insolvency Service, said: "We are very excited about establishing Cannon House as the centre of our new Birmingham operations, because the city is going through incredible change and investment.

"This project is an important opportunity to underpin our transition to new ways of working, enabling increased business performance, while optimising the use and value we achieve from our estate.

"Cannon House has provided us with an ideal platform to achieve this, as well as put us in the centre of the business community we serve.

"We have been working very closely with the landlord, trusted partners and other stake-holders to ensure we develop a modern, flexible and sustainable environment from which we can successfully deliver our services well into the next decade.

"We still have a lot of work to do until completion early next year, but I'm very pleased with the direction we are taking and the progress being made."

Cannon House was relaunched to the office market at the beginning of 2007, after a multi-million pound makeover and comprehensive refurbishment. The remaining availability includes 8,934 sq ft on level one, 10,226 sq ft on level two and 12,325 sq ft on level five.

Meanwhile, Nurton has been given the go-ahead for the second, and final, phase of the redevelopment of the Cannon & Priory site, with futuristic plans earmarked for Priory House.

Work begins in January with the first space available by January 2009.

The design includes 40,000 sq ft of penthouse office suites on a new level seven floor, which will run across the top of both the Cannon and Priory properties.