Diageo, the world's largest producer of alcoholic drinks, today admitted it will sell half of Guinness' historic home in Dublin and cut 250 jobs as part of a £520 million investment plan.

The company said it will continue to brew the Irish stout at St James's Gate, situated on the banks of the River Liffey, but will close properties around the brewery as well as shutting two smaller production plants in Kilkenny and Dundalk. The company will build a new brewery close to Dublin, which will open in 2013.

Diageo pledged to keep open the St James’s Gate site, where Arthur Guinness started brewing in 1759. The company will also continue to run the Guinness Storehouse museum, one of Dublin's biggest tourist attractions.

A spokesman for Diageo, said: “This shows that our commitment to the Guinness brand is absolute. This investment is because we truly believe in the future of Guinness and that it’s important to keep St James’s Gate as a centre of excellence.”

Diageo said that it expects to incur £120 million one-off costs from the restructuring, but could not comment on how much it would save once the new brewery is complete.

Paul Walsh, chief executive at Diageo, said: “This will be the single biggest capital investment made by Diageo in its supply infrastructure since the company’s creation 10 years ago and will enhance the cost-competitiveness of our global beer operations.”

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