The University System of Georgia Board of Regents approved on Wednesday a 20-year lease-purchase agreement for the satellite campus of the Medical College of Georgia.

The Board authorized the University and MCG to spend $25 million to lease the O’Malley building from the University Real Estate Foundation.

Renovations on the 36,845 square-foot building will begin this summer and will finish by June 2009 in time for the first class of medical students to start class, according to a University news release.

“The facility will have anatomy labs, exams rooms, lecture halls and everything we need to teach the first class of medical students,” Tom Jackson, vice president for public affairs, said.

The building is located on Williams Street along the North Oconee River and formerly housed a tavern and Dial America.

“We are excited to work in partnership with the University on this endeavor. MCG and UGA will have a new home while the navy supply school is renovated,” Eric Orbock, president of the University Real Estate Foundation, said.

The regents will pay $2.5 million for the first year and will have the option of renewing the lease for 20 years at a cost of $1.5 million. After 20 years the University will own the building, according to documents.

The Board also approved new graduate degree programs in international policy and environmental planning and design.

The Board agreed to implement a new “shared services” plan, which will streamline University payroll, John Millsaps, Board of Regents spokesman, said Wednesday.