The mixed-use development will comprise of 127 apartments, 34,500 sq ft of offices and 5,000 sq ft of commercial space plus car parking.
Demolition on the site has already been completed and Caddick starts construction this month. Completion is scheduled for early 2021.
Caddick Construction managing director Andrew Murray said: “This is a prestigious development in the heart of York city centre so we feel very privileged to be part of this development. The Caddick team is looking forward to the next two years where we will see new life being breathed into Hudson Quarter.”
Palace Capital chief executive Neil Sinclair said: “We are delighted that we will be working with Caddick Construction over the next two years to construct this exciting development situated only one minute’s walk away from York Railway Station and within the historic walls of York City.”