Called The Factory, the new venue is expected to provide a cultural centre for the city.
Construction is scheduled to begin in spring 2017 and the government is providing £78m towards the cost of the project.
It has been designed by Dutch firm Office for Metropolitan Architecture (OMA). It is OMA’s first major public building in the UK and is led by project partners Ellen van Loon and Rem Koolhaas, founder of OMA. The project is being developed by Allied London, in partnership with the city council.
The design team also includes Buro Happold and Arup Acoustics, with Gardiner & Theobald as cost consultant and Deloitte as planning consultant.
Sir Richard Leese, leader of Manchester City Council, said: “Factory is what the arts world and Manchester has been waiting for. It's the key to unlocking a wealth of new cultural opportunities in the city for audiences and arts practitioners, and also to massive economic gain for Manchester and the wider region. Factory isn't going to just transform this unused corner of the city centre, it's going to further transform the way we see the world, and the way the world sees Manchester.”