The Government has paid £8.3 million (€10.67m) for two key blocks of properties at Thomas Street in Dublin 8 which will be redeveloped as part of the digital village planned for the Liberties. The deal means that the State has now acquired all nine acres it needs for the project.

Nine of the 12 properties just bought are in one block running from 19 to 27 Thomas Street and include extensive grounds at the rear.

The three other buildings are at the western end of the block, next to the junction of Thomas Steeet and Crane Street.

The 12 properties were assembled over a 10-year period by a Dublin businessman and although the OPW had targeted them at an early stage, there was also a second bidder chasing the complex.

The vendor was represented by Brian Dwyer of estate agents Brian Dwyer and Partners. The completion of the £58 million (€73.64m) acquisition programme will allow work to proceed on the next phase of the project which will promote a multimedia and digital content "hub" in the Liberties area.

The Government has already committed £102 million (€130m) to "the digital hub" and early in the new year plans to invite the private sector to invest in the project.

The area designated for the scheme is broken into four different properties on either side of Thomas Street.

The largest area, known as the Windmill site and located directly opposite the main entrance to the Guinness brewery, was bought from the company. The Guinness Hopstore building and VAT Building number 7 will house Media Lab Europe, the flagship tenant of the digital village.

The decision to base the high profile project beside the Guinness brewery has pushed up property prices in an area which had been in decline for decades. Should the project prove successful, it is likely that the Government may acquire further property in the Liberties, Coombe and Thomas Street. The move has also fuelled speculation that Guinness will eventually scale back its operation in Dublin or even pull out of the city after 240 years.

The digital village is already behind schedule because of disagreements between senior officials of the Department of Finance and the Department of the Taoiseach over the purchase of property and the governance of the project.

The overall project is being managed by a State-appointed company, Digital Media District Ltd. Its head is Mr Paddy Teahon, former secretary of the Department of the Taoiseach, who also holds a similar post with Campus Stadium Ireland, the company set up to develop the national stadium.