The city's Watermark WestQuay scheme will feature a plaza by the medieval town walls, including new seating, lighting and green space.
Southampton City Council and developer Hammerson have made legal commitments to the project. Watermark WestQuay is the centrepiece of a series of developments planned for the city over the next few years.
Landscape architect SCG Associates has worked on the plan, along with Foreign Office Architects and BDP as sustainability advisers.
Hammerson development manager Russell Beresford explained: "Formalising the development agreement is the latest milestone for the scheme and is a fundamental part of the project's delivery.
"Following months of hard work, it demonstrates commitment from both sides to the continued regeneration of the city centre."
The 4ha Watermark WestQuay project is situated on the former Pirelli factory site that is currently vacant.
The council's cabinet deputy leader Royston Smith added: "This is the chance we have been waiting for to transform this site into one of the most exciting and attractive new mixed-use developments in the UK. The development will reinvigorate the city."