It will move to the eight story self-contained building at King Edward's Court, Paternoster Square in 2004.
The Exchange has previously announced its intention to relocate from Exchange Tower, where it occupies 62% of the floor space, because the building no longer meets the requirements of the business. The decision to relocate was reached after considering all property related costs, including the substantial costs associated with fitting out Exchange Tower if the Exchange was to stay at its current headquarters.
Chief Executive Clara Furse said: "I am pleased to confirm the Exchange's new headquarters will be based in the City of London. The City is widely regarded as the financial heart of Europe and the London Stock Exchange is part of its lifeblood. We want to stay close to our customers - most of whom are based in the City.
"The Exchange has ambitious plans to expand its products and services, and develop its position as the leading European equity exchange. We will be marketing our services hard and this building, where we will be the 'lead tenant', gives us additional marketing and brand-building opportunities.
"We also took account of the popularity of the Exchange's new Media Centre. Broadcasters now see the Centre as the best City location from which to broadcast City news, and companies listed on the Exchange see it as the natural place to brief the media and analysts. The Centre has become a powerful marketing tool for the Exchange, and a key factor in its popularity is our City base."
The Paternoster Square lease is for 25 years and is in respect of 220,000 square feet of office space. The lease payments will start in the financial year ending March 2005 at an initial rental charge of £12.5 million per annum.
The Exchange will be looking to dispose of Exchange Tower in due course. Funds raised through its disposal would be used to meet the costs associated with moving to new corporate headquarters, as well as for new business initiatives.
