Work on the Lincoln Transport Hub will now begin in a fortnight after the Department for Transport released vital funding for the project.
The £29 million scheme will see the existing bus station and two pedestrian footbridges demolished to make way for a new state-of-the-art facility, 1,000 space car park, and railway improvements.
Contractors Willmott Dixon Construction are due to start work on site in the week beginning August 29.
Government officials have said that the new project is expected to create up to 200 jobs in the city, and deliver an economic boost worth £9 million a year.
The Department for Transport has provided £11 million towards the project, with the City of Lincoln Council providing £16 million and the Greater Lincolnshire Local Enterprise Partnership contributing £2 million.
The £11 million is being delivered under the Local Growth Fund – a £12 billion fund to support a variety of projects including transport schemes, new housing and improving education.
Council leader Ric Metcalfe said: “This is an incredibly exciting scheme that will move Lincoln city centre into the 21st century, ensuring the potential for future growth, creating an attractive and connected gateway to the city and making it an even better place to live, work, visit and do business.
“I know many people will be glad to see our current bus station demolished. A new facility is long overdue and will be able to cope with even more than the seven million passengers who use the bus in Lincoln each year.
“We’ve received a huge amount of support for the hub scheme and I hope people will be patient while this vital work is underway.”
Angela Andrews, Chief Executive of the city council, said: “Lincoln Transport Hub is a vital scheme to ensure the future of our city centre and we are excited to be able to start on site in the next couple of weeks.
“These superb new facilities will revitalise the heart of our city centre, bringing huge benefits to our residents, visitors, businesses and commuters, as well as our local economy.”
Transport Minister Andrew Jones said: “A new bus station, car park and upgraded railway station will be a huge benefit to people who live and work in Lincoln, and those who visit the city.”
As previously reported, the project was split into two phases in January 2016, to allow the bus station, car park and shops to be built first.
The first phase, which no longer includes a dual-purpose footbridge, would begin earlier than anticipated and construction could be complete by the end of next year.
Phase two of the project will see a footbridge over the railway linking Tentercroft Street to Lincoln city centre constructed.
The council hopes to have the bus station and car park ready for opening in October 2017.
Road closures lasting at least 18 months on Norman Street, Oxford Street and St Mary’s Street will be introduced shortly.
Thornbridge and Sincil Street car parks will close permanently, as will the NCP Oxford Road car park.
The existing bus station will close when works start and a new temporary bus station will operate from Tentercroft Street.
Access to the railway station will be maintained from St Mary’s Street throughout the construction works.