Fredericton's Northampton Brewery will be building a new brewery inside the former Gibson Roundhouse site on Union Street after a land deal with the city.

Northampton Brewery, which is known for its Picaroons beer, will receive the historic property for $100 and it will transform the empty building into a brewery and a tourism centre.

Sean Dunbar, the company’s owner, said despite the low purchase price, both sides will benefit from the new arrangement.

Northampton Brewery will transform the former Gibson Roundhouse into a new brewery. (Google)

"Great price and then we spend a small fortune to refurbish it and start paying taxes on the brewery," he said.

"It's a great deal for the city. It should be a good deal for us as well."

The land deal was announced on Monday night at a Fredericton council meeting.

Dunbar said he expects to spend several million dollars building the brewery in the new location.

He said work on the new brewery will start in the fall and should be producing beer within a year.

He said another bonus for Fredericton is the facility will offer a community meeting space, an historic interpretation centre, public parking and washrooms for those using the northside trail.

"We'll have permanent community space that's available for people to come and meet and do events and things like that," he said.

"We want it to be a people place as well as a manufacturing facility."

The redevelopment plan will see the original portion of the roundhouse retained, according to the city.

Sean Dunbar, the owner of Northampton Brewery, said work will start on the brewery in the fall. (CBC)

Fredericton Mayor Brad Woodside said the new Picaroons brewery will mean revenue for the city.

"[It will generate] $85,000 to $120,000 per year in taxes. Right now, we're making no money on the property," he said.

The abandoned building is on the north side of the Bill Thorpe Walking Bridge and adjacent to Carleton Park.

The Gibson Roundhouse was built in 1885 by B. Mooney & Sons.

Canada’s Historic Places register notes the roundhouse was built with 500,000 bricks and "stands as a monument of local building materials."

The bricks used in the roundhouse’s construction were made at Boss Gibson’s brick yard

It was recognized in 2008 as an historic site.

The roundhouse building had been used by an automotive repair service business recently.