Google is to set up new headquarters at King's Cross in London, in property deal worth up to £1 billion.

The search giant will begin development of a 1 million square foot office this year, moving on from its current UK bases in Victoria and Holborn when the building work is set to be completed in 2016.

Google has not officially announced the value of the deal, but Reuters reports that the company will be investing £650 million to buy and develop the site, with the property worth in the region of £1 billion when it is completed.

The building, expected to be between seven and 11 stories tall, will occupy a 2.4 acre plot at the Kings Cross Central site. The area has seen major regeneration projects in recent years, including the redevelopment of St. Pancras International station as part of the opening of the Eurostar terminal in 2007. 

Previously US firm Google has tended to lease properties in overseas locations, but has purchased properties in Paris and Dublin in recent years.

Google's vice president for northern and central Europe, Matt Brittin, commented that the move is a "big investment" by Google, highlighting its commitment to the UK. "It's good news for Google, for London and for the UK," Brittin said in a statement.

The company also has offices near London's Old Street, occupying a seven-story co-working space known as the Campus at the heart of London's Tech City. Chancellor George Osborne was present at the opening ceremony, and welcomed the investment from the search company.

However, Google has also come under fire from the UK government for paying small amounts of corporation tax, with Brittin facing the wrath of a select committee last year.