The project, which includes work on the Central Library, the Town Hall itself and St Peter's Square, will start next year and will be complete in five years, Manchester City Council said.
"This is a once-in-a-lifetime opportunity to improve the services offered from these historic buildings and transform the area for residents and visitors to the city. Crucially, this investment will also create welcome jobs during a recession," said the council's executive member for finance and human resources Bernard Priest.
Manchester's oldest surviving theatre, the Theatre Royal on Peter Street, may also be restored after the council identified it as the preferred location for the Library Theatre Company. The group has outgrown its current Central Library home.
The local authority's executive member for culture and leisure Mike Amesbury said: "The relocation would have a positive effect on the cultural life of the city. It would be a great opportunity for the theatre company to expand its range of performances and its community work, while also returning this grade II listed building to its former glory."