Work is due to start this summer on the project, the final phase of the theatre district, which will include a 130-bedroom Premier Inn hotel, 2,500 sq ft of retail and 10,500 sq ft of leisure premises.
It is anticipated that the scheme will create over 100 new jobs when it opens in late 2016, stimulating a further £20 million investment in the local economy during construction alone.
It will be developed by UGS MK, a subsidiary of Bursha Holdings. The vendor was advised by Colliers International.
Bursha acquired the Theatre District four years ago. The firm’s legal counsel Jack Paravicini said: “We recognise significant investment is needed to stimulate a lasting change and are thrilled that Milton Keynes Council shares our vision.
"We are keen to create a family-friendly area with a vibrant daytime and evening economy that increases footfall and supports the adjacent Gallery and Theatre.”
John Bates, Premier Inn’s head of acquisitions (south), said: "This is another great location for us and another smart property deal achieved through excellent partnership. We are looking forward to construction getting going, to creating more Premier Inn jobs in Milton Keynes and to opening our doors to customers as soon as possible.
“We are delighted to be playing our part in investing in the city and unlocking the Theatre District regeneration plans.”
The site lies between Savoy Crescent, Avebury Boulevard and Lower 12th Street.
Colliers International planning director Jonathan Manns said: “This scheme represents a key opportunity to support Central Milton Keynes’ role as a leisure and entertainment destination. In rejuvenating and expanding the Theatre District, these plans also improve the wider public realm and enhance links to existing shopping facilities to the north and west of the site.
“It is a good example of how regeneration, focused on complementarity as opposed to competition, can support existing areas and catalyse change.”