Preparatory construction work is set to get underway on a major £600m redevelopment of Birmingham's New Street railway station, which is set to create a modern transport hub for the city.

The first phase of the New Street Gateway Project will see the NCP Pallasades lower-level car park transformed into a new concourse, which will be three-and-a-half times the size of the existing 1960s concourse. A new, iconic station facade will also be created. Work on the first stage of the scheme, which is being funded by Network Rail, Birmingham City Council (BCC), Advantage West Midlands (AWM) and Centro, is expected to be completed in 2012 before the second phase - the redevelopment of the existing concourse - gets underway.

BCC leader Mike Whitby said: "The Gateway project will transform New Street into a station that is the envy of the world and act as a catalyst for continued growth in the city. The project is at the heart of the master-plan for Birmingham." Mick Laverty, AVM chief executive, added: "New Street Gateway is vital to the regional economy. We anticipate the project will generate more than £2bn in transport and wider economic benefits for the region and lead to the creation of more than 10,000 jobs, which is why Advantage West Midlands is providing £100m to support the redevelopment."