US bank JP Morgan has confirmed plans to move to London's Canary Wharf in a £237m deal.

In a huge boost for the London market the bank signed an agreement with Canary Wharf Group today for the staged development of the Riverside South site at Canary Wharf.

Under the agreement Canary Wharf Group has sold the 999 year leasehold interest in the land to JP Morgan for £237m.

Infrastructure work on this site has already started and JP Morgan said it has instructed Canary Wharf Group to complete the design, planning and further infrastructure works for its new European headquarters building which will be designed to meet the expected future operational needs of the bank.

Canary Wharf Group will act as development and construction manager.

While design, planning, piling and raft construction work is being completed JP Morgan will, subject to market conditions, decide when to instruct Canary Wharf Group to proceed with final construction.

If construction of the building is postponed, or put off altogether, Canary Wharf Group will be paid for completed work and will also retain £76m representing a portion of developers profits related to the development.

A signed agreement is a positive sign for the London office market which has seen few deals complete. The agreement today follows JP Morgan's decision to pull out of an agreement with Hammerson and the City of London Corporation to relocate its HQ to a development site at St Alphage House near the Barbican earlier this year.

CB Richard Ellis and Jones Lang LaSalle are letting agents at Canary Wharf.