The Brighton Centre - one of the UK's main concert and conference venues - is to be demolished.
The Brighton Centre is expected to take two years to rebuild
The building is due to close in 2006 when demolition work will begin.
A new centre will be built in its place by 2008.
Councillors say it is vital the seafront venue, which is nearly 40 years old, is replaced by a more modern building.
The Brighton Centre is a regular venue for political parties' conferences and pop concerts and is the home of the Brighton Bears basketball team.
'No longer right'
Tuesday's announcement was immediately greeted with delight by tourism chiefs, who say a new venue is vital for their trade.
Architectural experts spoke of their relief that the 1960s building, which some see as an eyesore, was to become a thing of the past.
It's rather like an old Cortina and what we need is a Mercedes Benz
Roger Marlowe, Brighton and Hove Hotels Association
Council leader Ken Bodfish said: "The conference centre was right for its time but it's no longer right for today.
"It doesn't meet the needs of exhibitors, it doesn't meet the needs of conference people, it doesn't have appropriate break-out space, its restaurant facilities are not what customers want.
"What we want to do is change that."
'Dreadful, appalling building'
Roger Marlowe of the Brighton and Hove Hotels Association agreed the centre had become outdated.
He said: "If you look at the Brighton Centre now, it's rather like an old Cortina and what we need is a Mercedes Benz here.
"If we don't have it in the future then certainly Brighton will begin to diminish."
The centre stages this year's Lib Dem conference
Anthony Seldon, author of Brave New City, a book about Brighton and Hove, was far more scathing.
"I think it's absolutely fantastic, it is just a dreadful, appalling building," he said.
"How the architects of that building could have had the gall to inflict that shameless, dreadful building on the people of Brighton for nearly 40 years just defies belief."
Events being staged at the Brighton Centre this year include concerts by Tom Jones, Atomic Kitten and Jools Holland and the Liberal Democrat's party conference in September.