Revived plans to develop a derelict gap site in Edinburgh is expected to create 2,500 jobs and provide 145 new homes, new plans have revealed.

An international consortium headed by Artisan Real Estate Investors have outlined their plans for the Caltongate site in Edinburgh city centre.

The revived Old Town gap site is expected to generate about £43 million for the local economy a year, according to the developer.

The new plans follow the collapse in 2009 of the previous owner Mountgrange Capital, which had hoped to create 2,000 jobs and generate £300 million for the city by turning the land into offices, housing and shops.

Artisan's new detailed plans submitted to Edinburgh Council reveal a £150 million mix of leisure, retail and offices linking New Street and East Market Street with Waverley station and the Royal Mile, covering a total area of around 220,000 sq ft.

It will be centred on a £6.5 million civic square with office space, 400 hotel bedrooms, 28 retail units, 145 residential units and 40 affordable homes.

The site is expected to create 1,750 new jobs and 720 construction jobs in its building phase, which is planned to start in spring 2014.

An 18-month consultation with local people, businesses, civic partners and heritage bodies has led to many historic Old Town buildings being retained, include Canongate Venture and the facade of the Old Sailor's Ark.

Views of Calton Hill from the Mile will be preserved and the Jeffrey Street arches will be retained as small artisan units.

Artisan managing director Lukas Nakos said: "This planning application marks a significant milestone in the evolution of one of the most challenging city-centre developments anywhere in the UK.

"We are now delivering on our promises made when we first started this process some 18 months ago.

"We now have the opportunity to create, in the very heart of Edinburgh, one of Europe's most exciting and vibrant mixed-use communities which will set an international benchmark for sensitive and innovative development.

"During the last 18 months, we have listened to a huge variety of views and opinions on the development of the site and heard impassioned arguments relating to its unique importance, setting, heritage and community.

"Our planning application reflects this varied and dynamic consultation process and we feel we now have a proposal which balances ambitious and flexible commercial priorities with a genuine understanding of the area's community and civic context.

"Artisan will bring international capital investment of £150 million to the table, coupled with the vision and commitment needed to complete what has already been started.

"This is a long overdue opportunity to revitalise a strategic city-centre location between Waverley station and the Scottish Parliament - whilst being part of the very fabric of the historic heart of the city.

"The location is the missing piece of the jigsaw which will see the rejuvenation of the Old Town as a vibrant commercial and social quarter of international appeal."