The project will be funded by the council, the South West Regional Development Agency, local businesses and private funders.
Mackay said he wanted to transform the city centre, seen as a no-go area when shops close at night. He said: "It's a marvellous opportunity, just at the right moment when citizens want something done to their city. We have to ensure no neighbourhoods remain isolated."
He added: "Plymouth is probably the city in England with the best geographical situation. But at present it doesn't reach the water's edge because of the naval base. Now the naval base is being reduced, we can reinforce the connection between the city and the sea."
Architect-turned-developer Roger Zogolovitch, who worked with Mackay on the regeneration of Hastings in East Sussex, will collaborate with MBM on the project. He plans to work on the inner ring-road, which separates the main centre from the rest of the city.
We have to ensure than no neighbourhoods remain isolated
David Mackay, Martorell, Bohigas and Mackay Arquitectes