New office space and student accommodation is to be built in Dublin’s Digital Hub as part of a €40m development.

The Digital Hub, an incubation centre specifically for digital-focused enterprises, currently caters to a cluster of 70 companies in the Liberties area of the city.

The Digital Hub Development Agency says the development project will create 300 construction jobs in building accommodation for 500 students and over 10,000 square feet of office space.

It will also involve the renovation of an 19th Century grainstore building, which was once part of an old debtors’ prison.

The Digital Hub, which was founded in 2003, has had a chequered history and did not grow as originally envisaged.

It suffered a blow when MIT closed its Media Lab Europe in 2005, which had involved Government investment of over €50 million.

However the Digital Hub’s agency says a total of 170 companies have progressed through the enterprise centre, creating 2,000 jobs.

The new development will be carried out by Knightsbridge Student Housing and is due to start in August at a site beside Bonham St.