Nashville’s bid to secure a Major League Soccer (MLS) expansion franchise has been given a major boost after Mayor Megan Barry announced plans for a new $250m (€231.4m/£188.5m) football-specific stadium in the Tennessee city.

According to a statement on the Nashville Soccer Club website, the facility will have a capacity of 27,000 and be built on the Nashville Fairgrounds area of the city.

Should the project gain approval, funding for the stadium would come from a combination of three sources: $200m in revenue bonds, $35m in cash from the MLS ownership group; and $25m in Metro general obligation bonds to pay for public infrastructure associated with the new venue.

Nashville Soccer Club said that the MLS ownership group will be responsible for lease payments for the stadium used for debt service of the revenue bond and also to cover any costs of construction that runs past the deadline.

Barry’s plan also includes a pledge to the Metro Board of Fair Commissioners to approve a ground lease to the Metropolitan Sports Authority, which would then issue revenue bonds with debt service of around $13m each year.

In addition to lease payments, should this proposal gain approval, taxes from revenue generated at the stadium and private investment would be used to service the debt.

However, bonds would only be issued if an expansion franchise is awarded to Nashville. The city is set to find out if it has been successful in its bid to secure an MLS team in December.

“An MLS franchise represents an incredible opportunity for Nashville to continue its growth and take its place on the global stage,” Barry said. “This stadium plan and MLS bid represents significant private investment, and it safeguards taxpayers with a truly private-public partnership.”

John Ingram, the businessman leading efforts to bring MLS to Nashville, said the promise of a new stadium will put the city in a strong position to secure a new expansion franchise

Ingram added: “We are making this investment in Nashville because we believe in this city. This is a can-do community, and we know bringing MLS here is something sports fans want. We are an international city, and soccer is the world’s sport.”