Work on the extension of the £18.6m Midland Metro tramway through Birmingham city centre is scheduled to start by the end of September 2013 by Balfour Beatty, following the completion of detailed design and advanced works.

The project by Centro involves delivering a 1.4 kilometre extension linking Birmingham's Snow Hill and New Street railway stations, delivering more than 3.5m passengers a year to the city's retail quarter with an operational service scheduled for introduction by 2015.

Geoff Inskip, Centro's chief executive, said: "This is a prestigious project in the heart of Birmingham which demands a construction partner of the calibre of Balfour Beatty.

"We worked with Balfour Beatty last year when they built the Metro bridge for us over Great Charles Street. That was a clear demonstration of their proven track record in delivering projects on budget and on time."

During the scheme Balfour Beatty will provide up to 1,000 weeks of employment for local people and has formalised agreements with its supply chain to achieve local recruitment levels of 75%.

Bill Gifford, director of operations for Balfour Beatty, said: "We have a long standing presence in the West Midlands, so we're delighted to be delivering a scheme that will contribute so significantly to the region's economic and social prosperity."

The Birmingham project involves substantial improvements to the street scene and public realm including natural stone paving, street furniture, lighting and landscaping.