Google has signed a ten-year lease on a seven-storey building in London's Tech City.

Last year, Prime Minister David Cameron revealed plans to turn the parts of East London into a rival to Silicon Valley in California, dubbing it "Silicon roundabout".

The search engine said the new 25,000 square foot building would not have any impact on its existing UK HQ in Victoria, London. Located at 4-5 Bonhill Street, the building will be used to host "hackathons", training workshops and product demos. The search engine did not comment on the finances behind the deal.

"We announced our involvement in the Tech City project last year, and we've been working hard to make this vision a reality," said Google UK's engineering director, David Singleton.

"Finding a suitable building is the first major step, and we hope to announce more details about the organisations we'll work with and how they will use the space in the coming months. East London is already home to hundreds of innovative British startups and has huge potential for economic growth and new jobs over the coming years."

Meanwhile, Chancellor George Osbourne said "it shows that we can create the right environment to attract start-ups and established high-technology businesses".

"This shows that Britain is open for high-tech business."