Backed by a £1 million funding deal from Barclays, the new venue is expected to open its doors this summer and will operate independently from the Liquidroom.

Formally known as the Music box, the Liquidroom opened in 1997 and over 20 years has hosted live performances from the likes of Coldplay, Snowpatrol, the Black Eyed Peas, Calvin Harris, Franz Ferdinand, Paolo Nutini, Biffy Clyro and Gerry Cinnamon, as well as world renowned DJs such as Carl Cox, Sasha, Groove Armada and Deadmau5.

The nightclub’s owner John McWilliams hopes to grow the market share and continue to attract the best names in music, with ambitions to double turnover.

He said: “It’s an exciting time for the business and we hope that the additional bar will help us to attract new customers and high-profile partners such as the Edinburgh Fringe Festival who were introduced to last summer.

“Ongoing investment such as this will help to ensure the Liquidroom continues to be regarded as a go-to venue for music events in the capital and we’re looking forward to working closely with Barclays.

“With attractive loan rates and a hands-on relationship with a dedicated manager, it was clear that Barclays was the right fit for us.”

Stuart Brown, head of SME Scotland at Barclays, said: “The Liquidroom is a name recognised all over Scotland for the high calibre of acts that the venue attracts, and we were pleased to be able to offer support for the business to progress redevelopment plans.

“With an approach to lending which focuses on building local relationships, we were able to rapidly assess the strengths of the business and understand the diverse offering, identifying the products and solutions best suited to the Liquidroom’s growth plans.”