Business and community leaders have welcomed plans for a multi-million pound scheme to help boost Bury St Edmunds town centre and create new opportunities for retail and housing.

The moves include preserving the local heritage and the borough council will be discussing options including a potential £6.72m investment in the old Post Office, on the Cornhill, when they meet next Tuesday.

The exact details are being kept a closely guarded secret but potentials could include creating a new retail frontage on St Andrews Street South as well as the potential to widen the link to the town centre while protecting the historic frontage on Cornhill. It could also include the creation of new homes as part of the development.

Mark Cordell, the chief executive of OurBuryStEdmunds, the business improvement district in the town (BID), said: “This is very welcome news and especially in providing an integral link to the town centre.

“The proposals are interesting and exciting and we hope to be able to see some images of what is planned soon and there should be a public consultation on the project in June.

“We are glad that we have been involved as a consultative partner and I think people will be pleased with the proposals and it’s an opportunity to get new businesses into the town.”

And Martyn Taylor, chairman of the influencial Bury Society, said: “Anything that will improve the rear of the old Post Office is good news and also to retaining the historic value of the building is also important and what the council is planning to put forward will be good for the town.”

If approved by the council’s cabinet next week and subsequently the full council on April 24, detailed design work will be carried out ready for public exhibition early this summer and in preparation for a pre-planning and planning application to be made later this year.

St Edmundsbury Borough Council bought the old Post Office for £1.6m late last year after the Post Office Ltd decided to relocate its business into part of the neighbouring W H Smiths store.

The council identified the site as of strategic importance due to what was the emerging Bury St Edmunds Town Centre Masterplan and the site’s relationship to Cornhill/ Buttermarket, Market Thoroughfare and St Andrews Street South.

It is working with Donald Insall Associates to come up with designs that retain the Victorian Cornhill front which is in a conservation area while bringing it back into economic use and at the same time improve the look and feel of Market Thoroughfare and provide a new shop front onto St Andrews Street South.

Alaric Pugh, cabinet member for Planning and Growth, said: “The newly adopted growth investment strategy puts us in a great position to not only invest in this building but make a social and economic return for our communities and businesses. It means we can seize opportunities to encourage further investment, help create homes while protecting what makes West Suffolk such a great place to live. The council has been working closely with local groups through the masterplan and this process and their help will remain vital as this moves forward. I am looking forward to seeing designs further explored over the next month or so before they go on public exhibition in the summer.”

And John Griffiths, the leader of the council, said: “We are continuing to invest in our communities and businesses to bring wider benefits for all. This project is about ensuring that not just Bury St Edmunds town centre but the whole of West Suffolk continues to be a great place to live, work, shop, visit and enjoy for decades to come.

“Our new Growth Investment Strategy offers us the chance to deliver on a scheme that commercial investors might not consider and it also means we have the opportunity to invest in this building, protecting our heritage, while securing future economic growth and social benefits as well - for our communities and local businesses alike.”

The work on this and other masterplan related projects is being taken forward with a number of town centre groups, including the Bury Society, market traders and OurBuryStEdmunds Business Improvement District, all being consulted for their views.