Derwent London has agreed to buy back a site above Tottenham Court Road station, W1, from Crossrail.
The developer will pay £55m for a new 150-year lease on the 1 Oxford Street site, which was compulsorily purchased in 2009 to make way for the new high speed rail network.
Derwent has previously secured consent for a 275,0000 scheme designed by AHMM and work is now expected to begin in the first quarter of 2018 once the station is completed.
Under the terms of the deal Derwent will not pay for the site until development is completed, following which it will pay Crossrail a ground rent of 5% of the total rent roll in the commercial space, as well as 16% of the development profit.
The plans include 204,000 sq ft of offices, 37,000 sq ft of shops and a 350-seat theatre covering 34,000 sq ft.
Derwent chief executive John Burns said the scheme would boast “one of the best addresses in London”, and would form part of the company’s 2m sq ft holdings in the immediate vicinity of the Crossrail station.
Ian Lindsay, Crossrail land and property director, added: “The £1bn redevelopment of Tottenham Court Road station provides a once-in-a-generation opportunity to revitalise the eastern end of Oxford Street.”
