A wind farm powering more than a million homes is to be built off the East Yorkshire coast.
Developer Dong Energy said it had made the final investment decision to build the Hornsea Project One.
The company claimed the 157 sq mile (407 sq km) site, expected to be operational by 2020, would be the world’s largest offshore wind farm.
Turbines will be manufactured by Siemens in its newly-built Hull factory.
Brent Cheshire, Dong Energy UK’s chairman, said the project would help create local jobs.
“To have the world’s biggest ever offshore wind farm located off the Yorkshire coast is hugely significant, and highlights the vital role offshore wind will play in the UK’s need for new low-carbon energy,” he said.
The firm said it expected to create about 2,000 jobs during construction and up to 300 additional jobs, both directly and indirectly, when it was running.
Bird welfare charity the RSPB said it had concerns over the development due to the “high collision risk for seabirds using the area”.
The development is one of eight renewable energy projects being subsidised by the government under its £16.6 bn Contracts for Difference (CfDs) scheme which effectively guarantee prices for renewable energy suppliers.
CfDs was criticised in a report by the National Audit Office which claimed too much money was awarded to the project “without price competition” and is concerned this could ultimately increase costs.
The government said the projects will provide jobs and private investment.
The site will cover an area the size of more than 58,000 football pitches and will be located 75 miles (120 km) off the coast. Each of the 174 turbines will be 581ft (177m) high.
A cable connecting the site to the National Grid will come ashore at a site in Killingholme in North Lincolnshire.
Dong Energy has already built the Westermost Rough wind farm which consist of 35 turbines located 16 miles (25km) off the Holderness coast.
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