Community leaders have agreed a £3.9million contract to build a new HQ for Suffolk Coastal as part of a landscaped office village on the site of a former engineering works.

The council is now putting its current Melton Hill, Woodbridge, offices on the market – the proceeds from the sale and that of nearby Cedar House will help fund the project – and is aiming to move to its new premises late next year.

It has bought part of a five-acre site in Station Road, Melton, opposite Melton railway station and which was formerly home to pump suppliers Girdlestones, now being developed by Riduna Holdings.

District council leaders say the move will save £8m over the next 20 years.

Robert Whiting, Suffolk Coastal’s cabinet member with responsibility for resources and chairman of the accommodation project board, said: “The harsh reality is our existing headquarters in Melton Hill, Woodbridge, is an ageing building, which has become increasingly expensive to maintain and is too big for the council’s existing staffing level.

“The move will allow us to create a modern working environment, which is affordable, adaptable, sustainable and compatible with Suffolk Coastal being an efficient, forward-thinking organisation which is dedicated to giving local people the best possible quality of service at the lowest possible cost.

“We are faced with mounting costs the longer we stay on this site, whereas the new site will save us, and the taxpayer, an estimated £200,000 a year in running costs initially, rising to £500,000 a year in the longer term.

“This move will not place any extra burden on local taxpayers and we will have invested in a modern building, which is sustainable, cheaper to run and will be adaptable for our future needs.

“The additional benefit is we will be using a brownfield site, which has stood derelict for some time, and will give Melton a boost by moving into the village.”

Riduna Holdings Ltd, is delighted to have secured the sale to Suffolk Coastal, which will become the first occupiers of the office village project.

“We are looking forward to creating a landmark office building for Suffolk Coastal District Council, which will provide them with a modern efficient working environment and lead the way forward for other occupiers to join them on this premier office village site,” said a company spokesman.