450 construction jobs are to be created in a development project on the Grangegorman site in Dublin.

The €486m project was given final approval at today's Cabinet meeting and formally announced by the Taoiseach and the Tánaiste this afternoon.

The former psychiatric hospital is to be replaced by a new facility for Dublin Institute of Technology, which will bring 22 of its 27 schools together on a single site.

A new primary school will also be built along with modern facilities for mental health patients.

The primary school will be run by Educate Together and cater for 400 pupils.

Taoiseach Brian Cowen said: 'This is a significant project in terms of generating jobs and providing a key piece of infrastructure for education to develop our knowledge economy.'

The first stage of the project will take ten years, with potential for further development at a later stage.

Tánaiste Mary Coughlan said: 'I know that the creation of this single campus will enable the DIT to continue to implement its plan for internationalisation that covers international academic cooperation, research partnerships and membership of international strategic networks.

'At times like this we need to be open to innovative ways of financing and implementing projects and we have to base our decisions on clear analysis of the costs and benefits of each project.'