Partly funded by the Heritage Lottery Fund, the scheme includes plans to refurbish three Grade II-listed buildings, as well as constructing a new facility on the site of the former Manor Hotel, which is to be demolished.
The project in Athenaeum Street, dubbed The Place, will create new business suites, artists' studios, exhibition areas, a conference space and a cafe.
Designs for the development, which is being backed by the Sunniside Partnership, have already received the support of CABE and English Heritage.
Architect Kevin Brown said: 'The Place will be an eye-catching building in the heart of Sunniside.
'Its innovative design is set to inspire and bring new life to this historic part of the city centre.'
The Newcastle-based practice has now submitted a planning application for the project.