A new £46m contemporary arts centre is to open as part of the cultural explosion along the banks of the River Tyne.

Sitting in the shadow of the historic Tyne Bridge and the innovative ''blinking eye'' Millennium Bridge the Baltic Arts Centre is the biggest such venue outside of London.

The centre, housed in a converted flour mill, is expected to play a major part in the joint Newcastle/Gateshead bid to become European Capital of Culture in 2008.

The new centre, on the Gateshead side of the River Tyne, is expected to create about 500 jobs and generate an estimated £5 million a year for the local economy.

The Baltic Arts Centre, funded mainly through lottery money, was built inside the shell of the Rank Hovis mill and silo and the six-floor gallery now boasts 3,000 square metres of galleries, a cinema, lecture theatre, workshops and artists' studios.

As well as the art spaces there will be a shop, cafe and rooftop restaurant with spectacular views over the River Tyne.

The Baltic site was occupied from 1850 until about 1890 by the Gateshead Iron Works but lay derelict until the late 1930s when foundation work for the Baltic Flour Mills began.

The Baltic Flour Mill was opened as a working mill for the production of flour and animal feed in 1950 by Rank Hovis.

At its height the mill employed around 300 people and about 100 were still working there when it closed in 1980.

The centre will open at one minute past midnight on Friday night.

On a visit to Tyneside to assess the joint European culture bid, Culture Secretary Tessa Jowell said of the Baltic: ''It is a most extraordinarily beautiful building,'' and hailed it as an example of regeneration through the arts.

In a bid to spread the word and tie in with the community spirit the centre is hoping to provide, local taxi drivers and hairdressers were invited to a sneak preview of the centre after bosses deemed they were the people most members of the public chatted to.

Currently under construction a few hundred yards from the Baltic is the new Sage Gateshead music centre.