Work has begun on the £15m Hotel Indigo in Liverpool.

The 151-bed, four-star hotel - which is partly being funded by a £10m package from the Co-operative Bank - is being built by Wigan-based contractor Denizen.

The hotel will be owned and operated by north west development group Sanguine Hospitality.

Nick Taplin, Sanguine's managing director, said: "Merseyside's tourism economy is worth over £1.4bn and rising. In spite of one of the worst recessions in recent times, the city region continues to grow as a destination of choice for domestic and international visitors.

"Our level of investment in Hotel Indigo reflects our level of faith in the city and the direction it is taking. We intend to bring something new and creative to Liverpool's hotel market, giving visitors a real alternative and further strengthening the city's appeal."

Andrew Gill, vice president of development for International Hotels Group Europe - the firm behind the Indigo Hotel brand - added: "As a branded boutique hotel, all Hotel Indigo properties are unique and designed specifically to reflect their location, which gives Sanguine Hospitality the freedom to put their own mark on the hotel."

Falconer Chester Hall Architects and its associate company, FCH Interiors, have been appointed to design the hotel, which is due to open in Spring 2011.