Walsall's landmark bus station does a lot more than shield passengers from the rain. It makes double-decker travel glamorous.
Riding the last bus from Wolverhampton to Walsall will never be the same again. For years, the number 529, after battling through the West Midlands sprawl, dumped its passengers at the mercy of the traffic in a squalid rank behind the shops. Not any more. In a few weeks' time, Walsall's new bus station is finally set to open, turning a place that represented all that is wrong with public transport into a symbol of what it could be.

"It was a really dreary, miserable place that was incredibly dangerous," says Simon Allford of architect Allford Hall Monaghan Morris. "It demanded something of great power. We wanted to make it a proper place to arrive."

And so it is. As the bus bounces along St Paul's Street, the terminus looms into view: a spaceship, landing lights ablaze and pierced with mysterious holes, hovering at shoulder height to the surrounding buildings. The floating ellipse appears to be tethered to the ground – rather than held aloft – by a forest of spindly steel trees.

Nobody in the town can quite believe it has managed to stay up, and everyone has a theory. "It's like Star Trek," says a man in the butcher across the road, adding, "it's sinking". Not sinking but falling over, according to another. "Pisa has nothing on this. It's the leaning bus station of Walsall!"

The rumours are untrue, but eminently believable: the project has achieved notoriety for problems real, exaggerated and imagined. When the props were removed last September, the canopy's concrete edge beam deflected (true); water pooled on the surface (true); and the rooftop lawn of sedum, a rock-clinging plant that requires little maintenance, was mothballed while engineers investigated (true, but seeding is promised in the autumn).

Following fears that a runaway bus might bring the structure down, extra columns were added (false) and external strengthening ordered on existing ones (false, but they may be filled). A smaller canopy in the adjacent square was declared unstable (the jury is still out on that one).

Despite the hysteria, the £6.5m terminus is ready to go and, in July, the belching buses should be docking at their new mother ship. It redefines at a stroke what bus stations could look like, lending double-deckers the same glamour that London's new Jubilee Line stations gave the ramshackle Tube. It is the perfect counterpoint to Walsall's other recent landmark, Caruso St John's exquisite New Art Gallery.

The 1995 RIBA-administered design competition was the first ever held for a bus station. The client, regional public transport executive Centro, wanted something that would raise passengers' expectations of public transport, but was still expecting a rack of shelters.

"The competition was just for canopies," says Allford, who nonetheless praises Centro's ambition. "They wanted the bus station to be a decent place in the town, and had this vision that it should be more like an airport."

Instead of shelters, AHMM's winning solution proposed sweeping all of the functions of a bus station under one vast roof. It turned this from a utilitarian shelter into a proper building by sliding in a café and shop, and offered passengers glass-walled, open-topped waiting areas between the bus bays.

The architect suggested reconfiguring routes through the site, increasing safety by reducing the number of places pedestrians had to dash across bus lanes, and replacing the numerous chicken-runs with a couple of proper crossings.

AHMM also offered Walsall a civic bonus: pushing the access road away from the adjacent St Paul's Church would free up enough space to create a new public square.

The modest plaza, linked by a flight of steps to the bus station, is a calming space at the centre of a network of busy streets and narrow alleys. "It's like the front room of Walsall," says AHMM partner Paul Monaghan enthusiastically. "If they won the FA Cup, everyone would go there."

The traffic-free space is already proving a restorative tonic. Retailers Mark One and Debenhams, whose premises back on to the square, plan to replace their back doors with new shopfronts, giving people more reasons to linger in a place they once scurried through.

The saga of Walsall marks a coming of age for AHMM. Long regarded as one of architecture's brightest young things, the Walsall project has given the practice a taste of the circus that accompanies any attempt to build something bold and different. "When you get to do the size of projects we're doing now, the stakes are higher. You read about Foster and Rogers and they're always having a tough time," says Monaghan. "We're part of the establishment now," Allford says wryly.

A spaceship in Walsall was always going to raise eyebrows. Monaghan says the building's extraordinary form was inspired by the 1946 film A Matter of Life and Death, in which David Niven plays a bomber pilot who narrowly avoids being dispatched to heaven. In the film, heaven bears a striking resemblance to the bus station – a floating plane punctured by large holes through which an ethereal light floods.

Walsall might be few people's idea of heaven – but for those arriving by bus, it now has something akin to pearly gates.