Under the regeneration plan, the south-east London area's General Gordon and Beresford Squares, along with Dial Arch Square, are to be reworked into a 'coherent central focus'.
A design competition will be launched shortly, according to London Development Agency director Peter Bishop, and a design team will be in place within approximately six months.
Commenting on the decision to select Woolwich, Bishop said: 'This is an exciting time for Woolwich, with lots of regeneration activity in the area. A redesigned public square at the heart of the town centre will be key to making that rejuvenation really work for the people who live there.'
He added: 'It will be a community space that brings people together, complementing and linking with the various regeneration proposals for the town. We will be looking for the very best design skills for this high profile project.'