More than 6,000 new homes are to set to be built in once rundown parts of Manchester thanks to a £1bn deal with City’s Middle East owners.

Manchester council today announced the 10-year agreement with the Abu Dhabi United Group, with the two parties forming a partnership dubbed ‘Manchester Life.’

The first phase will see more than 830 privately rented homes built in the Ancoats and New Islington areas of east Manchester, near to City’s Etihad Stadium.

Work is set to start on that stage of the masterplan next year.

Manchester council leader Sir Richard Leese said: “Today’s announcement adds another commercial dimension to the already significant investment made by Manchester council and ADUG in east Manchester, and in doing so progresses the regeneration story which began in the 1990’s and was accelerated by the 2002 Commonwealth Games and ADUG’s recent development of the Etihad Campus.

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“The planned transformation of the eastern edge of the City Centre is the single biggest residential investment Manchester has seen for a generation.

“Building thousands of quality new homes will be a fundamental part of our growth story and will deliver significant socioeconomic impact. We look forward to working with Abu Dhabi United Group to create a world class exemplar of regeneration.”

ADUG and Manchester council will form the Manchester Life Development Company to oversee the 10-year project, which will see up to £1bn ploughed into the building of new homes on the ‘eastern fringe’ of the city.

The partners said there was scope for other investors to get involved further down the line.

It is hoped the phase one will also create demand for retail, leisure and commercial developments that will create thousands of jobs for locals.

The selection of Ancoats and New Islington for phase one builds on previous developments like the creation of of new healthcare sites, a free primary school due to open in New Islington in September 2015 and the transformation of Central Retail Park, on Great Ancoats Street.

ADUG board director Marty Edelman said: “ADUG, through Manchester City Football Club, has come to know Manchester City Council’s vision for regeneration and its ability to deliver major initiatives effectively.

“Given Abu Dhabi United Group’s existing long term commitment to Manchester and the Council’s economic growth plan, it was a logical decision to look at ways to create a commercial partnership with the city to deliver its wider residential strategy. We are effectively investing in the opportunities and positive circumstances created by our joint investments to date.

“We are extremely proud of the resulting Manchester Life joint initiative that will complete the transformation of the Ancoats and New Islington areas.”

ADUG is a United Arab Emirates private equity company owned by Sheikh Mansour bin Zayed Al Nahyan.

The Group was originally formed as the investment vehicle for the takeover of City in September 2008.

Since then, ADUG has expanded its football interests by buying New York City Football Club, Melbourne City Football Club and creating Manchester City Women’s FC.

It has also concocted plans for the Etihad Campus and City Football Academy on land next to the Etihad.

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