Thousands of government workers to be based at Birmingham's new Arena Central development

They will be housed in a 240,000 sq ft building neighbouring the new headquarters of HSBC's UK high street banking business.

The move will include thousands of HMRC staff being moved from more than a dozen tax offices across the region. Sites in Wolverhampton, Brierley Hill, Walsall and Telford will all be closed by 2020-2021, under plans first announced in 2015, and their staff moved into Arena Central. Telford will retain a specialist tax office, however.

They will be joined by staff from the Department of Work and Pensions' existing offices in Birmingham and 3 Arena Central will eventually house 3,600 public servants.

It is part of the Government's drive to modernise its office estate and has seen the HMRC sign a 25 year lease on the 14-storey building in the biggest pre-let deal Birmingham has seen in more than a decade.

Demolition and site clearance work is due to start imminently and the building is expected to be handed over for fit out in the spring of 2020, with the first staff moving in later in the year.

The move is part of the Government Hubs Programme, which is intended to reduce the number of isolated and under-used offices that the government has by co-locating departments in shared buildings across the UK.

The Government says departments moving to hubs will need less space as they adopt smart working principles, which will reduce their operating costs.

The move has been hailed locally, with Councillor Ian Ward, the interim leader of Birmingham City Council, saying: “This investment by the Government in Birmingham city centre is a major vote of confidence in the city’s continued regeneration. It reflects the importance of our strategic location, improved connectivity and extensive skills base.”

Minister for Government Resilience and Efficiency, Caroline Nokes, said: "This new lease is great news for Birmingham, a vibrant modern city with high-levels of skilled graduates and a proud tradition of providing high-quality public sector services as well as a flourishing manufacturing sector.

"The new government hub in the city centre will not just be a catalyst for regeneration, but it will also mean that the civil servants working within it are equipped to deliver the best quality service to the taxpayer."

HMRC chief executive Jon Thompson said: "We’re delighted to be part of the new UK Government Hub in 3 Arena Central, Birmingham.

"This is another step in HMRC’s transformation into a modern digitally advanced tax authority. It’s the beginning of a process that will see our colleagues come together in state-of-the art facilities, enabling closer working relationships and increasing our effectiveness in collecting taxes. It will also make HMRC an important contributor to the economy and to communities in and around Birmingham.

Andrew Rhodes, who leads DWP’s customer service operation, added: "Birmingham has an important role to play in our services for a range of benefits.

"Moving to the new hub will provide a more efficient working environment than our current offices in the city, giving us greater flexibility to meet changing customer and business needs."