Ambitious plans to create a large sports and entertainment district in Calgary, Canada have been given the green light after a public funding package was agreed for the development.

The City of Calgary has agreed to provide half of the funding for the CA$550m (US$416m, €371m, £344m), project, which is driven by Calgary Sports and Entertainment Corporation (CSEC) and the Calgary Exhibition and Stampede Limited (Stampede).

The project, located within the downtown area at Victoria Park, will be anchored by a multi-use indoor arena. The arena will become the home of National Hockey League (NHL) franchise Calgary Flames and has been described as "a catalyst for redevelopment".

As well as the 19,000-capacity arena, the district will feature a "festival street" and public spaces. The project is central to City of Calgary's vision of establishing a Culture and Entertainment District.

It is also a key component to the city's economic strategy – called Calgary in the New Economy – which was approved in June 2018.

“For years, I’ve been saying any investment of public money must have public benefit," said Mayor Naheed Nenshi. "This deal does that. It’s a fair deal.

"I’m pleased that it will allow us to move forward on the important work of city building, especially in east Victoria Park.

“Given their success in building and designing the East Village, I’m looking forward to the Calgary Municipal Land Corporation’s design, engagement and community integration on this project.”

Construction work on the arena and the surrounding district is set to begin by 2021.

Plans to build a new arena for the Calgary Flames franchise have been in the pipeline for more than five years. A previous project called CalgaryNEXT – which included a 20,000 indoor arena and a 40,000-seat American football stadium – was shelved in 2018 after no agreement on funding was reached.