Birmingham's historic Jewellery Quarter is set to receive an extensive refurbishment after plans for the £160m St Georges scheme were given the go-ahead by the Birmingham City Council (BCC).

The first phase of the 6.8-acre (2.8-hectare) mixed-use scheme, which is the largest development in the Jewellery Quarter for more than 200 years, includes the £55m transformation of the former Kettleworks factory into office and retail space and a 60m (197ft) x 50m (164ft) public square featuring outdoor performance space. Although the 109-year-old Kettleworks building is not listed, developer Chord Deeley intends to retain the red-brick exterior, while a fifth storey will be added to the site along with the revamp of a 1950s extension. A nearby 1950s warehouse will be transformed into a multi-storey car park.

Future plans for the site, which have been drawn up by Online Architects and will be implemented over a five-year period, include the construction of a 151-room Ramada Encore hotel and a 100-room budget hotel, 1,145sq m (12,230sq ft) of restaurants and bars and a residential development. Chord Deeley - a joint venture between Coventry-based Deeley Properties and local developer Chord - expects to begin work on the first phase in June, including the demolition of a two-storey 1970s glassworks.

Clive Dutton, BCC's director of planning and regeneration, said: "The Jewellery Quarter is one of Birmingham's prized possessions. Major development on the scale proposed by Chord Deeley has not been seen in the Quarter for more than two centuries." Peter Deeley, chair of Chord Deeley, added: "St Georges is hugely significant for the Jewellery Quarter. It will change the economy from one which has traditionally been over reliant upon crafts and arts to one which can accommodate workers from the growing services sector."

Wright Silverwood has been appointed to market the retail and leisure elements of the scheme, which has also involved consultants Urban Initiatives.