The campus will be built on the banks of the River Usk

It will house the Newport School of Art, Media and Design and sit alongside the city's Riverfront arts centre.

Building work is expected to start in 2007 and it is anticipated to be ready for the autumn semester of 2009.

It is part of a �50m development by the University of Wales Newport in order to cope with a rise in student numbers, which have risen more than 12%.

A spokesman for the university said the rise in applications was the third increase in three years.

Roger Peachey, chair of the board of governors said: "Our aim is to double student numbers at the university by 2010, and we have seen an unprecedented surge in applications over the past three years.

"The new campus is an integral part of our strategy, which will bring benefits not only to Newport, but the economy of south east Wales in general."

The university expects a further rise in student numbers

University leaders have been working on the plans with Newport Council and Newport Unlimited - the body responsible for work to make the city centre more attractive to businesses, residents and visitors.

It is hoped the new campus will boost the regeneration of the city centre.

Vice-chancellor Prof James Lusty said: "This is a very important development both for us and for the city of Newport.

"It will bring learning back into the heart of the city, and provide a significant boost for the regeneration of Newport," he said.

Newport Council leader Bob Bright said: "The regeneration of Newport is not just about bricks and mortar, important though that is.

"By bringing the university back into the city centre, we will be bringing jobs, a lively art culture and provide well-educated graduates for the future growth of Newport."