The proposed development will see a new pedestrian square and street created in the district linking the main commercial and business centre with the west of the city.
Fountain Square is intended to breathe new life into the area behind the Castlecourt Shopping centre and Donegal Place.
More than 320 new residential units - 20 per cent of which will be designated social housing - are also to be built in the wider south west quarter.
Social development minister Margaret Ritchie said the proposals represented the latest phase of the masterplan to regenerate the city centre.
She said the first step of the south west project would see £5 million spent redeveloping the nearby Bank Square.
Work will then get under way on the new square and street.