At the heart of the development will be 'Dalston Square' - the largest new public space to be created in the area for over 100 years.

Proposals for the square include children's play-areas, green areas and space for entertainers or exhibitions. The square will also house the entrance to the new East London Line station 'Dalston Junction' - set to open in 2010.

The project moved into an important new phase this week following the appointment of Barratt Homes as a partner in the development.

Barratt will work closely with the London Development Agency (LDA) and landowners - Transport for London and Hackney Council – to build more than 500 new homes, including both social rented housing and homes for sale.

Dalston Square will also be adopted as part of the Mayor's 100 Public Spaces programme.

Jules Pipe, Mayor of Hackney, said:

"This new development will bring major investment to the local community, with the borough’s first proper link to the Tube network offering easier access to jobs across London and encouraging more investment into the area. The new homes, library, open space, shops and restaurants will boost the heart of Dalston."

The scheme will be delivered through two construction projects called 'Dalston Lane South' and 'Dalston Junction Interchange' (with Dalston Square linking the two sites).