Oxford has received a £5.4m cash boost to help pay for the regeneration of the West End and Bonn Square.
The West End Partnership, the organisation responsible for the refurbishment, has already received £1.6m from the Government.
The cash will be spent over three years and brings the amount pledged so far to nearly £7m.
City council leader John Goddard said: "This is a positive step to regenerate this neglected part of Oxford city centre.
"We welcome the Government's continuing commitment to this major redevelopment.
"We plan to deliver more than 800 new dwellings, 50 per cent of them affordable, in a sustainable and eco-friendly way."
Some of the cash will pay for the redevelopment of Bonn Square which is expected to open to the public during the summer.
The revamp includes the planting of seven semi-mature trees and new seating.
The Tirah Memorial will remain in its current position.
Jane Pearson, senior development executive at the South East England Development Agency, said: "Following on from the success of the multi-award winning Oxford Castle development, we look forward to seeing the West End of Oxford go from strength to strength."
Oxfordshire County Council leader Keith Mitchell said: "I look forward to seeing changes on the ground in the coming years."
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