Ambitious plans to build more than 3,000 homes, offices and shops in the heart of Birmingham have been approved.

The £1.9bn Birmingham Smithfield scheme, which is being developed by Lendlease in joint venture with Birmingham City Council, aims to regenerate a 17-hectare site around the historic Bullring Markets.

According to the partners, work will now start on the site later this year.

But a question remains around Lendlease’s degree of involvement going forward following its decision last month to withdraw from development and construction in the UK and US.

At the time of its announcement to retrench activities to Australia, Lendlease said it would seek to cut its developer involvement in existing schemes to a maximum of 25% and sell Lendlease Construction.

The plan to create a new city centre destination in the Smithfield area will be delivered in four phases over 15 years.

Colin Murphy, project lead on Smithfield Birmingham for Lendlease, said: “This is a major milestone for the Smithfield project and important step forward in Birmingham’s transformation as an international city.

“We look forward to continuing our engagement with tenants, residents and everyone else connected to this once in a generation opportunity.”

Councillor John Cotton, Leader of Birmingham City Council, said: “Obtaining planning approval is a significant step in delivering the Council’s ambitions for Smithfield Birmingham in partnership with Lendlease.

“This £1.9bn development will transform the area, creating a new community in the heart of our city, generating thousands of new jobs and training opportunities, and delivering over 3,000 new homes. We are delighted to see these exciting proposals moving forward.”

The hybrid planning application sets out plans for over 3,000 homes in the area alongside nearly 1.3m sq ft of shops and workspace.

More than 50 new buildings form part of the masterplan drawn up by architect Prior + Partners, along with a flight of other architects working up detailed building plans in phase one.

Plans include two public squares – Festival Square and Market Square – that will form a new connection between the Bull Ring, Digbeth and the Chinese Quarter.

The detailed element of the project accounts for around a third of the overall planned Birmingham Smithfield scheme.