“Having agreed a contract with AEG the last piece of the puzzle is in place turning this into a reality,” said Madeleine Sjöstedt, head of the council’s culture and sports department.

The arena, to be located in the south of the city, will replace the current Söder Stadium and is set to open in 2012 with a cost estimate to the tune of 2.7 billion kronor ($400 million).

Details of the agreement remain confidential yet the city’s political leaders have promised that the project will be ”cost neutral for Stockholmers.”

Events should cover its costs and the arena should aim to show a profitable business by 2019.

Primarily a sports venue for football and ice hockey, the stadium will be built to host 30,000 spectators and extend to 40,000 for pop concerts, with a retractable roof.

The city council is set to make a formal decision on the financial implications on December 14th after which building on the new arena can commence.

AEG is a world-leading player within the sports and entertainment arena industry.

“We have a very professional partner,” Sjöstedt added.

”AEG runs over 180 arenas across the globe so if anyone can make this happen, they can.”