It signals another phase in the changing face of Westside, which recently went to market as a major development opportunity.
The area has already seen the opening of a Sainsbury's superstore adjacent to it and the building of 'The Way' - a £5.5 million youth zone.
The timing of the markets switchover minimises disruption and means all market stall holders - indoor and outdoor - can remain trading where they currently are until the works are finished.
The existing indoor market and Heantun House will be demolished, while the outdoor markets are to be re-invigorated and modernised, with purpose built cabins adding to the existing stalls.
The new market will house 46 licensed outdoor stalls and 22 casual outdoor stalls, which will be enclosed by 16 cabins.
Councillor Steve Evans, Cabinet Member for City Environment, said: "The new cabins will help bring the existing indoor and outdoor markets together to enhance the customer experience.
"The work will be completed in phases with a launch event prior to Easter, new branding and website, and an ongoing programme planned to enhance the new market.
"After meeting with the market traders last night (Tuesday 3 November) it is clear there is a lot of positivity about this change.
"It will prove an asset to any new development on Westside by providing footfall and vitality."
Market traders representative, Robin Newby, added: "It is a great idea for the new market to be all outside - and it will be good for the people of the city.
"The current market has had its day and a more modern market is the way forward.
"There is room for all the existing stall holders at the new outdoor market and there are really exciting times ahead - I'm sure it will be good for business."
- released: Wednesday 4 November, 2015