Blackpool Council has announced that it has signed a deal with Muse Developments for a £220m mixed-use scheme that is set to transform the famous Lancashire seaside resort.

The Talbot Gateway development agreement is centred on a 10-hectare (24.7-acre) site around Blackpool North railway station and Talbot Road, and is designed to create a new business district in the town. Plans include a new pedestrianised square, a supermarket, hotels, shops, cafés and restaurants, as well as 160,000sq m (1.7 million sq ft) of office and business space and the potential for a new library, a health centre and replacement law courts.

Muse Developments was selected as the council's preferred development partner in 2007, and has been working with the local authority, regeneration company ReBlackpool and the Northwest Regional Development Agency (NWDA) on plans for the scheme. It is hoped that work can get underway on the project in two years time, subject to receiving the necessary planning permissions and the results of local consultation.

Sir Howard Bernstein, ReBlackpool chair, said: "This agreement marks the culmination of three years of hard work and marks a significant milestone in the regeneration of Blackpool and its transformation into a year-round resort. "This project will transform a neglected and under-utilised area of the town into a welcoming, family-friendly gateway, encouraging more people to visit, providing better services for local people and encouraging inward investment."

Mike Horner, regional director for Muse Developments, added: "Talbot Gateway is an exciting scheme for Blackpool – it is much needed and will provide the town with a vibrant new civic focus comprising a mix of uses and buildings and a step-up in quality for local residents and businesses alike. "Even in these difficult times, we are confident of investment in Blackpool and we now look forward to working alongside the council and the NWDA to bring about change on the ground at the earliest possible opportunity."