The £28 million six-storey development will include ticketing facilities, as well as a café/restaurant and retail space, while a new 120 bedroom Sleeperz hotel will be accommodated on three floors above the new concourse.

The contractors were appointed to the development in August despite project costs reaching more than £7m over the pre-tender estimate.

Designed by architects at Nicoll Russell Studios, the proposed new station building will occupy the site of the former concourse and it has been carefully designed to create an impressive new landmark within the Central Waterfront development and also an attractive new gateway into the city for rail passengers.

Ken Guild leader of Dundee City Council said: “After the preparation work clearing away the outdated concourse and tired 1970s structures it is good to see our contractors Balfour Beatty on site and the new buildings getting underway.

“They are committed to providing a lasting benefit for the local community and their winning bid for the contract included a detailed community engagement plan to provide 10 work placements, seven new industry entrants, six apprenticeships and a guaranteed interview for every local job applicant.

“In total the work will bring more than 120 construction jobs per year for the two years of the build; £11.6m of gross added value to the local economy; and knock on benefits to the local supply chain, which all add up to make the concourse project a key economic driver for the city while it is being built.

“In addition when the new railway station concourse opens it will create jobs in the associated hotel and retail development.

Hector MacAulay, Balfour Beatty managing director for the East of Scotland, said: “We were delighted to been awarded this contract to construct the new Railway Station and Hotel for Dundee City Council.

“Following on from our recently completed New Olympia Pool and Leisure Centre in East Marketgait, this is a key project in the exciting programme to regenerate the Waterfront in Dundee.

“We are particularly pleased to be able to work with the council to generate significant community involvement in the construction phase through local employment and apprenticeships, which will deliver sustainable benefit to the city in the long term.”

The project will be over the live railway with normal train services continuing during the work which is expected to be completed in just over two years. The station’s completion in time for the opening of the V&A Museum of Design is critical to its business and travel planning.