The money from the Scottish Partnership for Regeneration in Urban Centres (SPRUCE) fund will supplement the initial investment made by developer Interserve to get the project started.

The Haymarket will transform the currently derelict former goods yard next to Haymarket Station into a 650,000 sq ft multi-purpose development.

The joint venture between Interserve and Tiger Developments will include office and retail space, a hotel and a two storey underground car park.

The public cash is facilitating the first phase of work.

This includes site preparation and the strengthening of two railway tunnels as well as archaeological excavations which are now underway.

David Westwater, Interserve Development Director said:

“We are pleased that the SPRUCE Fund is investing alongside Interserve in this exciting project.

“We are delighted that work has begun on site to prepare for construction above ground and the Scottish Government’s welcome contribution has been pivotal in helping the development to progress.

“Its support underlines that this is one of the most significant regeneration schemes in the UK outside of London and that is further reflected in the very strong interest shown by the business community already.

“The Haymarket will create a new commercial focus for this vital gateway, creating investment and jobs for the long term benefit of the whole city.”

The total development costs of the first phase of works at the site are £29.5m.