A £20million development featuring new shops, bars, restaurants and seven-storey hotel has been given planning permission.
The scheme is the final phase of the Theatre District, and construction will begin this summer.
A 130-room Premier Inn hotel will form the centrepiece of the plan, alongside 2,500 sq ft (234 sqm) of retail and 10,500 sq ft (994 sqm) of leisure units.
Developers reckon the scheme will create over 100 new jobs when it opens in late 2016, as well as stimulating a further £20m investment in the local economy during construction.
Jonathan Manns, planning director of Colliers International who advised on the development, said: “This scheme represents a key opportunity to support central Milton Keynes’ role as a leisure and entertainment destination.
“In rejuvenating and expanding the Theatre District these plans also improve the wider public realm and enhance links to existing shopping facilities to the north and west of the site.
“It’s a good example of how regeneration, focused on complementarity as opposed to competition, can support existing areas and catalyse change.”
The site is located between Savoy Crescent, Avebury Boulevard and Lower 12th Street.