This follows expert independent advice that the deal represents a sound long-term investment for taxpayers, while creating conditions to accelerate regeneration in a strategically important part of the city centre.

County council bosses say this also supports a consistent approach to redeveloping the west end of the city, sitting alongside the reimagining of County Hall as a hotel, and wider redevelopment under way around the railway station.

READ MORE: New Oxford Castle Quarter attractions

In 2005, the council decided to sell a long-term lease for Castle Quarter to enable major investment in a site that had previously operated as a prison for many decades.

That investment transformed the site and brought new activity into the city centre. Since then, the mix of uses at Castle Quarter gradually evolved until the site was snapped up by the Westgate Oxford Alliance in 2016.

While some elements, including Malmaison Oxford hotel, continue to perform strongly, others offer scope for further investment, according to the council, particularly given the site’s location close to the railway station, and Westgate Oxford.

County councillor Dan Levy (Image: Oxfordshire County Council)

Dan Levy, the county council’s cabinet member for finance, said: “This is an exciting moment for Oxford city centre, but it is not a decision the council has taken lightly. We have carried out thorough due diligence and sought expert advice to make sure the risks to the taxpayers and the county council are low while the prospects for real benefits are high.

“When the opportunity arose to purchase the lease, we looked closely at the financial, legal and commercial implications. The clear conclusion was that returning the lease to the county council as the existing freeholder was the right decision, with good prospects for both the city centre and public funds.”

As existing freeholder of Castle Quarter, the council took the opportunity to purchase the lease when it became available.

Following careful consideration and having taken advice from legal, financial and property experts, it was determined that the deal represented “an exceptional opportunity”.

Malmaison Oxford hotel at Oxford Castle Quarter (Image: Andy Ffrench)

Mr Levy added: “Combined with the transformation currently under way in and around the railway station, this creates an opportunity to refresh and boost the Castle Quarter and support positive change to the western approach to the city centre.

“The site is very close to Westgate, the city centre attractions, the railway station and the new hotel that will replace County Hall. The ingredients for success are clear to see and there is excitement about the change that can now begin to be delivered.

“We are operating in a challenging financial environment and so it’s really important the council makes prudent, well evidenced decisions.

“This decision allows the county council and a successor council or councils after local government reorganisation to influence very positive change in the city centre while delivering a strong financial return to support the delivery of frontline services.”

Oxford Castle Quarter (Image: Andy Ffrench)

Castle Quarter features Oxford Castle & Prison, Malmaison Oxford, Kelpie Coffee, Namaste Village Oxford, The Slug and Lettuce, the Swan & Castle, and The Key Learning Centre.

In February, it was announced that Oxford Unwrapped is preparing to bring four new visitor attractions to empty units at the site off New Road,

The Trevor Osborne Property Group developed and owned Oxford Castle Quarter from its opening in May 2006 until 2016.

It’s the 20th anniversary of a visit by the Queen who arrived to welcome the relaunch of the Castle Quarter.

The site was then purchased by the Westgate Oxford Alliance (a joint venture between Landsec and The Crown Estate) for £47.2m in 2016.

Oxford Castle Quarter went on the market last year for offers in excess of £30m.

A £60m scheme to transform County Hall buildings into a stunning boutique hotel is being led by Reef Origin, which previously converted the former Boswells department store into The Store hotel.