New headquarters for the Government and Legislative Council will be built on the Tamar site, with $6.4 billion to be spent on construction.
The new complex, which could be up to 50 storeys high, is scheduled for completion in 2007.
Although officials have made no estimate of the prized site's value, they say it will be approximately matched by the sale of the Central Government Offices and the Murray Building under plans announced yesterday. Industry estimates for the waterfront Tamar site have ranged from $10 billion to $16 billion.
Part of the so-called 'civic corridor' will be community facilities and a waterfront promenade. Design and construction will be put up for open tender.
Officials said the development would create 5,000 jobs, claiming the overall economic benefits exceeded the commercial value of the site next to the PLA Garrison.
The Secretary for Planning and Lands, John Tsang Chun-wah, said the decision to build on the Tamar site instead of selling it was taken after considering the needs of the Government, the projected demand for office space and overall planning for the Central waterfront.