Newcastle’s last major brownfield site is set to be transformed into a new neighbourhood with 2,500 homes thanks to government confirming a £121.m funding package.

The package will fund vital remediation, groundworks and infrastructure activity, fixing complex land issues that have long acted as a barrier to investment at the site at Quayside West at Forth Yards.

Despite its prime location near Newcastle Central Station and the city centre, the site has lain derelict for decades.

Government has approved the business case for the package, developed by Homes England, working in partnership with the North East Mayor and Combined Authority, Newcastle City Council and Network Rail.

Kim McGuinness, North-east mayor, said: “This derelict land is in a great location on the banks of the Tyne yet has stood mostly unused for 20 years, which is a huge waste of potential.

“That’s why we promised to transform areas like this and now that’s exactly what we’re doing. We’ve secured funding so we can get the last brownfield site in Newcastle city centre ready to start building the homes that local people need.

“This won’t be a vast estate, where people can’t access the services they need, but a thriving community with great transport links, green spaces and shops.

“We’re driving the transformation our region needs – from brownfield to beautiful – and today we’re announcing a huge step towards achieving that here at Forth Yards.”

The new funding package will pave the way for a new development platform and subsequent appointment of a private sector delivery partner, with the procurement process due to start in the coming months, while public sector partners will continue to accelerate progress across the whole Forth Yards site.

Quayside West, a parcel of land with capacity for around 1,100 homes alone, was brought into public ownership in 2024 after being acquired by Homes England, the government’s housing and regeneration agency.

It is one of the largest parcels of land at the centre of Forth Yards, which is set to become a new, sustainable mixed-use neighbourhood next to the city’s central station and Quayside, giving the city a new, well connected western gateway.

The site is a strategic priority for Newcastle City Council and the North East Combined Authority, which last year strengthened ties further with Homes England through a Strategic Place Partnership.

Leader of Newcastle City Council, Karen Kilgour, said: “Forth Yards is arguably Newcastle’s most exciting development site that in time will provide thousands of new homes and create hundreds of jobs.

“The funding will act as catalyst for development, allowing us to bring forward infrastructure improvements that will open up the site to attract much-needed private sector investment.

“In about 15 years it will have created a whole new part of the city to the west and provided a new community for our residents while adding significantly to our economy.”

The news today follows the recent government announcement on Forth Goods Yard, another parcel of land at Forth Yards, being one of the first regeneration opportunities to be brought forward as part of the creation of Platform4, a new property company focused on transforming rail-led land through the creation of new homes and neighbourhoods.