A £23 million project to build new student accommodation for the University of York will be handed over to the university free of charge.

A complicated deal will ensure that the 742 student bedrooms on two campus sites, mainly for postgraduates, will cost the university not one penny. The new rooms will add to facilities at Wentworth College and Halifax Court.

The accommodation - on which work has just begun - will cost a further £1.3 million in management and amenity buildings and as part of the agreement Jarvis will not only build the rooms, but maintain them as well.

In exchange, the construction group will be granted a 30-year leasehold on the sites, with the university passing rents on to Jarvis.

The bedrooms will be built in two phases, the first to be ready for students this October; the second in time for the October 2002 intake.

It is part of a massive five year programme now in its third year to upgrade and build some new student accommodation to ensure that most students have their own single en-suite rooms.

This, in turn, is part of an £80 million building programme, including reconfiguration of biology research laboratories and the Alcuin College redevelopment which brings together on one site all the university's teaching interests in the social sciences, especially health care and social policy.

Commercial property lawyers at Nelson & Co brokered the negotiations for the University with Eversheds acting for Jarvis and Barclays Bank through their joint university building organisation,

University Property Projects (UPP) .

UPP has already successfully entered into similar arrangements at Plymouth University, Reading University and the Northern College of Music in Manchester.

Ian Shuttleworth of Nelson & Company said: "The documentation was extremely complex but this is an excellent deal for the university and will provide much-needed student accommodation."