The campus will be situated on the banks of the River Usk in the city centre, and will be the first phase of an intended £50m development for the University of Wales, Newport, with partnership funding from Newport City Council and Newport Unlimited.

Contractors HGB will be moving onto the site to conduct initial site clearing work in the coming weeks.

The new campus, designed by architects BDP, will house Newport Business School and part of Newport School of Art, Media and Design.

Anne Carlisle, pro vice-chancellor (academic), said: "The building will be physically transparent and open to the city, rather than being enclosed behind high walls.

It is hoped that the campus will help transform the city centre by becoming a magnet for cultural activity along the riverfront and a centre for enterprise that embraces a contemporary arts centre, extensive exhibition space and a national photographic archive.

The chief executive of Newport Unlimited, John Burrows, said: "The new city centre campus will transform the look and feel of Newport's city centre.

"It is one of the key projects in transforming the centre of Newport and of regenerating the whole city.” 

The current Allt-yr-yn Campus will be sold to part-fund the new development in the city centre, while the other campus at Caerleon will remain.

The new campus is scheduled for completion in 2010.