Work has started on The Butts, one of Coventry's most important regeneration schemes.

MCD Developments is transforming the former City College site into a £110 million mixed-use scheme - which will be home to a major new employer in the city.

The Butts will feature more than 500 apartments, commercial space, leisure facilities and cafe bars.

A new 65,000 sq ft state-of-the-art building will become the home of the Qualification and Curriculum Authority, which is moving from London and will employ more than 500 staff.

The arrival of the QCA - which maintains the national curriculum and associated assessments, tests and examinations; and accredits and monitors qualifications - is a coup for Coventry City Council which lobbied hard to win the major Government relocation.

MCD is starting work on the QCA building as the first phase of the scheme and the organisation hopes to be operating from its new headquarters during 2009.

Ken Boston, QCA chief executive, said the move would bring new jobs to Coventry.

He noted: "The choice of Coventry represents the considerations of its excellent accessibility, the effective transport links, standard of living, facilities and potential workforce.

"While we expect that some of our current London staff will move with us to Coventry, there will be significant opportunities to recruit staff locally.

"When considering the benefits of moving our offices from central London, QCA under-took a full evaluation on a number of cities in England. All made presentations and held information meetings for QCA staff. We were pleased that the Secretary of State approved our board's recommendation that we move to Coventry."

As part of the master plan for the scheme MCD is restoring the former neo-classical college building, which dates back to 1935. It will house office, leisure and cafe facilities with the potential for some apartments.

Birmingham-based MCD is also restoring the 650-seat art-deco Butts Theatre and creating a piazza around it allowing the complex the potential to stage outside performances. Steven Byrne, chief executive of MCD, said: "This is a landmark development for Coventry and it is wholly fitting that it should be the home of QCA.

"The city is carving a fine reputation for the scale and quality of its regeneration and The Butts will play a key part in that.

"We are working with the council and other interested parties to create a development that brings a lasting improvement to this area of the city."

Councillor Kevin Foster, cabinet member (city development), said the QCA's decision to relocate to Coventry was a sign of how the city was developing.

"The Butts is a key part of the regeneration of both our city centre and the surrounding area. What is particularly pleasing is that our city's heritage is being preserved, not destroyed, by progressing with this scheme as the frontage of the old college will be retained.

"The start of work on this site, coupled with the recent news about Severn Trent's relocation, is another step to creating more of the opportunities local people deserve and a city centre of which we can all be proud."