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The proposed £193 million Library of Birmingham took another step towards becoming a reality with the announcement that Carillion has been appointed official contractor to the project.

The Wolverhampton-based firm beat off competition from industry giants Laing O’Rourke and Sir Robert McAlpine who were also vying for the contract for the Dutch-designed building.

The Library of Birmingham, which will integrate the library with the Birmingham Repertory Theatre, will create a new cultural centre in Centenary Square.

The multi-million pound construction and fit-out project is set to create an estimated 250 new jobs over the three-year build period which will commence in 2010.

Carillion regional director Simon Burton said: “We are delighted to have been selected for this major contract which will provide state-of the art facilities for local people for decades to come.

“The new civic building will also have a significant international profile and we look forward to working with Birmingham City Council to deliver this prestigious project.”

The new building will be developed on land adjoining The REP in Centenary Square, bringing the library and theatre together to share facilities and create a unique cultural centre for knowledge, learning, arts and entertainment.

As well as a shared reception, studio performance space and catering facilities, the building will include study areas, exhibition spaces and state-of-the-art interactive displays giving access to collections which have regional, national and international importance.

City Council leader Mike Whitby said: “The Library of Birmingham is extremely important to the future economic prosperity of the city and marks another important step forward for Birmingham and our award-winning Big City Plan.

“The Library will be the biggest in Europe and will support the life-long learning and skills development for Birmingham’s citizens and local businesses.

“The appointment of a construction partner for the Library of Birmingham is an example of the way in which Birmingham is actually delivering the Big City Plan in a tangible way.

“This moment symbolises the journey from the vision of the library to the beginning of the stage where we can actually start to deliver our pledge to provide the people of Birmingham, and the region, with a first class state of the art library that our City deserves.”

Dutch architectural practice Mecanoo was chosen in August to design the landmark building, one of the largest local authority-funded projects in the º£½ÇÊÓƵ.

Mecanoo founding partner Francine Houben promised the new library would be a “warm and welcoming people’s palace”.

The practice has already designed many highly original library, learning and arts centre buildings including National Kaohsiung Performing Arts Center in Taiwan, and the Library for the Technical University in Delft.

One of its designs, the Learning Center for the Ecole Polytechnique in Lausanne, revolves at 15 degrees per hour - the same speed as the Earth.

But Carillion’s appointment to the Library of Birmingham project comes just a couple of weeks after city council finance officials admitted plans to pay for the regeneration of Birmingham city centre by raising millions of pounds from land sales are in danger of being derailed by the economic downturn.

Capital receipts earmarked by the city council from selling development sites to private sector investors are likely to be “much lower than previously projected, if they can be realised at all”, a briefing paper to the cabinet warned.

The current Central Library also represents a thorn in the side for the City Council’s plans.

The new Library of Birmingham would replace the present library which, with Government permission, will be demolished and replaced by a six-acre Paradise Circus site redeveloped by Argent.

About £15 million of the cost of building the new library depends on the current Central Library being demolished and the land sold for redevelopment.

But this is not a given as the Brutalist John Madin-designed building is the subject of an application for listing currently being considered by the Government.

The decision-making process on the listing has been delayed by the appointment of a new Culture Minister Andy Burnham who recently took over from Margaret Hodge.

Mike Whitby has spoken out passionately against the building, writing to the Government declaring the building to be unfit for purpose, poorly designed and unworthy of preservation.