Sir Ian Wood is willing to invest up to £50m in the project
One of Scotland's richest businessmen has pledged up to £50m to create a "new heart" of Aberdeen's city centre.
Sir Ian Wood is backing a proposal to develop a new street level city centre square on the site of Union Terrace Gardens.
The funding will be subject to a Scottish Enterprise-funded feasibility study which will determine the cost and scale of the project.
However, plans for the new Peacock Visual Arts centre could be affected.
The feasibility study will look into what private and public sector funding can be accessed.
The aim is to provide Aberdeen with a city centre square to rival the best of any Northern European city.
Scottish Enterprise will commission engineering experts and urban designers to consider the options.
The most ambitious option, which is Sir Ian's vision, would attract his investment of up to £50m - but could require the re-positioning of the new Peacock Visual Arts Contemporary Arts Centre.
The feasibility study will also consider less ambitious options for the site, which it is said would incorporate plans for the arts centre.
Peacock Visual Arts warned it could be badly hit by delays to its project.
Sir Ian said: "The goal is to give Aberdeen a vibrant new heart to reflect both the success of the region and its position as a leading Northern European city.
"The vision is transformational - a street-level square with the very large space over the Denburn Road and railway covered in.
"I see this as the 'people's' square with something for everyone, and how that square will be developed, both above and below ground, is open to public debate."
He explained: "This development is of significant regional, national and international importance and will be a clear statement of Scotland's ambition in the energy industry worldwide.
"Today we are launching the feasibility study and the public debate."
He said he would only be prepared to invest in a scheme which had the "strong support" of the people of Aberdeen and the north east of Scotland.
The plan could have an impact on the Peacock plans
Aberdeen City Council leader Councillor Kate Dean said: "The regeneration of Union Terrace Gardens has been seriously considered in the past - but for the first time we now have the prospect of significant private sector financing, which has never been on the table before.
"Maximising the space occupied by the gardens would give us the chance to regenerate a far wider area and greatly improve the connections to other parts of the city centre, which at the moment are somewhat disconnected.
"We keenly anticipate the results of the feasibility studies and would encourage everyone in Aberdeen to get involved in the consultations."
First Minister Alex Salmond said: "I look forward to seeing the outcome of the feasibility study.
"It strikes me that in these tough economic times there is all the more reason to think big for the future of the north east of Scotland.
"We should be excited by the scale of his vision and his commitment to ensure great things can be made to happen."
A Peacock Visual Arts spokesperson said: "Whilst we would always welcome investment in the city centre, Sir Ian Wood's announcement puts the current Contemporary Arts Centre development in jeopardy.
"A delay in proceeding with Peacock's project will likely mean that we will lose our design team, architect and campaign team. There would be immediate redundancies at Peacock. Our funding package is time-limited and we must use it or lose it.
"It is unlikely that the project could be revived should Sir Ian's feasibility study introduce further delays into the process. We have written to Sir Ian to explain the challenges that his scheme and its timescale present to us."
Sir Ian is chairman of the multi-million pound energy services firm, John Wood Group.
It is one of the UK's largest energy services companies.
Sir Ian has chaired the company since 1982 and was awarded a knighthood in the 1994 honours list.