A total of 1,300 workers were made redundant at Llanwen in 2001

Birmingham-based St Modwen Properties, which is behind the plan, specialises in developing brown field sites and land abandoned after the decline of traditional coal and steel industries.

The scheme - a mix of houses and industry and business - would be the largest of its kind in Wales since the regeneration of Cardiff Bay.

St Modwen has said it would invest �200m in the site, but estimated that the development would create an end value of �750m.

Executive director Richard Froggatt signed the deal with land owners Corus in a late-night meeting on Friday.

He said: "We are looking at a development of 1,700 houses and employment prospects and feel that this is the right way to go.

"The mix of jobs will depend on the occupiers we can attract, but should run into thousands."

Newport Council leader Sir Harry Jones has welcomed the news and Welsh Economic Development Minister Andrew Davies described it as a new beginning for Llanwern.

Development chief Richard Froggatt - �200m deal for land

Corus still employs nearly 2,000 workers at Llanwern, but is selling off 600 acres after it finished iron and steel making with the loss of 1,300 jobs in July 2001.

Mark Carr, managing director of Corus Strip Products UK, said it they wanted the land put to the best possible use.

St Modwen has already worked on joint ventures with British Coal and British Steel (now Corus).

These include Trentham Lakes in Stoke-on-Trent, the former Hem Heath Colliery, where the development will extend over 160 hectares and will include leisure, residential, distribution, industrial and office uses as well as Britannia Stadium, the new home of Stoke City Football Club.

Other aspects of regeneration into which St Modwen has moved include its brown field land residential programme, which has seen thousands of housing plots created on former tile works, collieries and defence sites.

Mr Froggatt said that hopefully development would start towards the end of 2005, depending on planning applications and the project would extend over 10 years.