The Brockholes Wetland & Woodland Reserve project will turn a former gravel-extraction site near Preston into a major community attraction.
The 106ha site will feature habitats including lakes, reed beds, flower-rich grassland and a connection to 66ha of adjacent semi-natural ancient woodland.
A cluster of floating buildings, based on an ancient marshland village, will form a visitor centre designed by Adam Khan Architects.The landscape design work is being carried out by an in-house team from the Forestry Commission.
Funding for the project has been granted by the Northwest Regional Development Agency, known as the NWDA, under the £59m Newlands programme, which transforms brownfield land into community woodland to act as a catalyst for economic, social and environmental benefits.
NWDA chief executive Steven Broomhead said: "With an increase in visitor and tourism facilities on-site and the provision of well-managed green space for local people, it will enhance the positive perception of England's north-west region as a whole."
The Newlands partners will work with site owners Lancashire Wildlife Trust to transform the site, which is expected to attract hundreds of thousands of people and inject an economic boost into the local area and region as a whole. Work will start this spring and the construction of the visitor centre will begin later in the year. The completed reserve and visitor centre is expected to be open for visitors by 2011.
Forestry Commission regional director Keith Jones added: "This will enhance the local economy with jobs and investment, offer a high-quality visitor experience and will also provide a much-needed green space for local communities and nature."