SOUTHAMPTON City College has struck a "massively significant" deal to sell off an ageing corner of its site as the first step in a £10m investment plan.

College bosses have agreed to sell the Deanery site in Chapel Road to developers Bellway homes.

Cash from the deal is now to be ploughed back into new buildings and facilities on the college's nearby St Mary's Street site.

The Deanery, built as a school in the 1930s, will now be demolished and, subject to planning permission, be replaced by housing for the planned St Mary's village.

City College is the largest further education centre in the Southampton area, with more than 10,000 students enrolled on full and part-time vocational courses.

The deal, for an undisclosed sum, is the first step in a major redevelopment of the college, designed to allow it to offer "21st century" facilities.

Principal Lindsey Noble is delighted, particularly as an earlier deal for the site fell through.

She said: "That left us in the lurch and put us back a bit. This deal is good news. The building we are disposing of is not suitable. It's not an adequate venue for students' learning.

"It is massively significant in terms of the way the college is going forward. I don't think there has been anything on this scale before."

The college already has permission for Z Block, the temporary name for around 2,542 sq m of new teaching space.

Building is set to start January 2003, and the block will open its doors to students in 2004. The facility will offer a smart new "shop front" to the street and will house a student travel shop and student welfare services, as well as classrooms.

But the college has even more in store for students.

Ms Noble said: "We will be bidding for further funding for phases two and three. We are envisaging a total college redevelopment of £10m over three years."

The next stages of the plan involve tearing down ageing buildings on the St Mary Street site and replacing them with purpose-built teaching blocks and modern facilities.

David Walton, managing director of developers Bellway Wessex, thinks the Deanery deal will be good news for the area.

He said: "The acquisition of the site provides us with another opportunity to demonstrate our significant skills in regenerating brownfield locations and returning them to the community."