The scheme will regenerate a derelict piece of land, by creating a new north east maintenance centre for Network Rail, and further mixed-use development delivered by 3R Land & Property.

Network Rail will invest £5m to create a two-storey office building, storage facilities and car and cycle parking spaces. The new office space, totalling 2070 sq m, will bring together up to 300 staff from existing offices and sub-depots across the region.

As part of the same deal, Network Rail has sold King’s House at Forth Banks in Newcastle to Northumbria Police Authority, which will fund the construction of the new maintenance centre.

Work on site will start towards the end of this year and take a year to complete.

Paul Rutter, route infrastructure maintenance director for Network Rail said: “This new centre will allow us to bring teams together, creating opportunities to work more efficiently. The centre will manage maintenance of the railway throughout Northumberland and Durham plus the Tyneside, Wearside and Teesside areas.

“This scheme will help regenerate a neglected area of Gateshead and create jobs for the local economy as well as delivering a fantastic new mixed-use development for the local area.”

The remainder of the site, which is owned by 3R Land & Property, has outline planning consent for a 138-bed hotel, 10,000 sq ft of offices, an 8,000 sq ft restaurant and 150 additional car park spaces. This will create a further 150 jobs for Gateshead. JK Property Consultants are handling the search for a developer.

Kevan Carrick of JK Property Consultants, who are acting as agent and development consultant for 3R Land & Property said: “This scheme will significantly improve Askew Road, an important gateway to Gateshead Town Centre. The sale to Network Rail will give the area a much-needed boost, with the remainder of the site being offered to hotel, restaurant and office occupiers or developers.”

Barton Willmore, the UK’s independent planning and architecture consultancy acted as planning consultants for the development.

Knight Frank acted for Network Rail in relation to the disposal at Forth Banks in Newcastle and in relation to the purchase of the site in Gateshead.