The square, based in the Northern Quarter of the city, will be brought back to life with three linked buildings providing 13,500m 2of floor space.
The 'Hive' scheme is being backed by developer Argent, which is also behind the regeneration of Manchester's Piccadilly Gardens, and is aiming to attract media, fashion and design business to the area.
Argent chief executive David Partridge, said: 'We've done a lot of analysis of Manchester's strengths and that's made us want to extend our property portfolio beyond the financial and professional services sector, who we are catering for at Piccadilly Gardens.
'The Hive is going to appeal to people who aren't into conventional office space, so we're going to make the building as flexible as possible.
'Businesses will be able to create whatever kind of office they want - and pretty much whatever size they want, from 70 to 900m 2.'
Running down the centre of the scheme will be a new shopping arcade, as well as a communal space, a restaurant and a bar.
The first phase will total 7,000m 2and is set to be completed in 2008.