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The stage is set for London’s West End to have its first new theatre for 30 years, as Westminster City Council on Thursday night granted planning permission for a state-of-the-art building on the site of the Astoria music venue.

The glass-clad building will lie at the heart of London’s theatreland, atop Tottenham Court Road station on Charing Cross road. The application for the building was made jointly by Derwent London, a property developer, and Crossrail, which has been rebuilding the station in preparation for the £16bn rail project linking routes east and west of London.

The decision marks a blistering run for London theatres, which have seen their revenues rise throughout the economic slowdown, last year topping £500m for the first time. Their artistic success has drawn Hollywood A-listers prepared to work at a fraction of their onscreen rates in exchange for the kudos of a London opening.

The theatre’s design will be one of the most flexible in London, allowing the auditorium and seating to be quickly transformed from the traditional “proscenium arch” layout to a horseshoe-shaped setting or even full “theatre-in-the-round”. Depending on the configuration, the venue will accommodate between 350 and 500 people.

The plan was conceived by architects Allford Hall Monaghan Morris and Ian Albery, a theatre design consultant who worked on the conversion of the Donmar Warehouse, one of London’s most vibrant small theatres, and Sadler’s Wells.

The new venue has not yet been named but will be run by Nimax, a theatre production company which owns West End stages the Apollo, Lyric, Duchess, Garrick and Vaudeville. On April 11 it bought the Palace Theatre, its sixth, on nearby Shaftesbury Avenue, from Andrew Lloyd Webber’s Really Useful Group for an undisclosed sum. The group has signed a 125-year lease with the Charing Cross site owners.

Nica Burns, Nimax chief executive, told the Financial Times: “I’m delighted that this beautiful theatre has gone on to the next stage of its development. It will add greatly to the potential of London theatremaking.”

A former artistic director of the Donmar from 1983 to 1989, Ms Burns said she had been working on the plan for a year. “I didn’t want it to compete with other theatres. I wanted it to offer a different space for London in a fabulous location for actors and directors.”

The theatre can expect a boost from passing trade, as numbers going through Tottenham Court Road station after Crossrail’s completion are predicted to rise from 150,000 a day now to 200,000.

Eager thespians, however, will have plenty of time to learn their lines before treading its boards. Work on the building will not begin until 2017 at the earliest, following completion of the Crossrail and Underground station. At that time Derwent has an option to repurchase the site from Crossrail.

The application included plans for a second, larger building on the corner of Oxford Street and Charing Cross road, with 177,000 sq ft of space for offices over eight floors and 37,000 sq ft for retailers.

Cllr Robert Davis, deputy leader of Westminster City Council, said: “This flagship scheme marks an important investment in the city and will play an important part in the redevelopment of east Oxford Street.” Derwent, which has property holdings of 1.5m sq ft in the area, declined to give the value of the development.

The Astoria, itself built on the site of a Crosse & Blackwell pickle factory, played host to bands such as Deep Purple, David Bowie and Blur in its time as a music venue. It was demolished in 2009, after the site was compulsorily purchased by Crossrail ahead of the station’s redevelopment.

The scheme is backed by the mayor of London, but objections were lodged by English Heritage, which said the development would change the “established character of the street, which would cause harm to the area”.

Copyright The Financial Times Limited 2017. All rights reserved.

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