The scheme, that is a partnership between the Council, Blackburn Cathedral, the Homes and Communities Agency (HCA) and developer Maple Grove, will transform the town centre and could create up to 350 jobs.
Funding has been approved and the developer, who built the £21 million Barbara Castle Way health centre, is working on the detailed design work.
The first phase of the Cathedral Quarter development is almost complete – the new Blackburn Youth Zone is due to open in the New Year.
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A planning application for the remainder of the development is due to be submitted this month and it will be completed in March 2014. The proposals include a hotel with 60 bedrooms, 30,000 square foot office space and a new public square.
The proposed Clergy Court includes 11 apartments and houses including a library, diocesan offices and refectory.
The new bus station on Railway Road will include further stops as well as bus facilities on Ainsworth and Penny Street.
Councillor Dave Harling, Executive Member for Regeneration said: "The development is part of an ambitious 15 year plan which has already seen the regeneration of Blackburn town centre. The completed £66m Mall shopping centre is bringing thousands of shoppers into the town every week, the new Youth Zone is opening in the New Year and Cathedral Quarter is the next stage.
"The proposed hotel and offices will result in around 350 jobs and the new bus interchange alongside the railway station will create an impressive gateway to the rest of the town centre. The new public square surrounding the cathedral will be somewhere where people can gather and will want to spend time."
(CD)
