The abandoned 179-year-old Charlestown Navy Yard, a military ghost town that once bustled with shipbuilders producing and repairing some of U.S. history's most famous warships, will soon thrive again.

A $200 million renovation of the deserted buildings into shops, restaurants, and 1,200 luxury apartments in the heart of downtown Boston is a milestone in urban revitalization efforts, city officials said in today's announcement of the waterfront project.

"This is the most important development in the history of this city; it is incredibly significant histroically, aesthetically and financially," said Mayor Kevin H. White. "It is the single biggest land development in the city backing up a whole urban renewal project. It is almost a town within a town."

The project, which is largely financed with privated money, is set to begin March 1 and is expected to be completed in six to 10 years. It was kicked off today with the dedication of "Constitution Quarters at Charlestown," named after the nearby USS Constitution (Old Ironsides). The quarters consist of an 130-year-old machine and assembly shop which was used to build the Merrimack, the first screwsteam frigate. The Merrimack was later ironclad by the Confederacy to meet the Union's Monitor in the most famous naval battle of the Civil War.

It was also used to build such fighting ships as the Intrepid, the first ironhulled steam torpedo ram ship, and the Harford, Admiral Farragut's flagship at the battle of Mobile Bay.

The massive red-brick structure with granite trim and a slate roof will become a 362-unit apartment complex with one to three bedroom apartments, with rents from $450 to $800 a month. Ten percent of the units will be set aside for fedrally funded housing for the elderly.

The project, the anchor in waterfront restoration, includes the lucrative Fanueil Hall Market urban mall, and is one of the largest urban renewal projects in the nation.

All along the East Coast, downtrodden pier areas are being turned into attractive living and shopping areas. Municipal officials are optimistically touting these renovations as a reversal of the post-war flight to the suburbs.

Boston officials claim the project, will boost the tax rolls by about $4 million annually and create about 1,700 permanent jobs along with 300 jobs annually during construction in a neighborhood that now has 14 percent unemployment.

From drawing board to dedication, the joint effort of city, state and federal officials, has taken four years -- a near miracle in redevelopment circles.

The Muster House used to guard the yard, the Ropewalk and Hemp House, the sailmaking building and timber storage facility and several other historic buidlings will be restored for about $150 million by Immobiliare New England.

The company responsible for $150 million of the restoration is a Boston venture of two major international development and construction firms: Societa Generale Immobiliare, of Rome, which built the Watergate complex in Washington, Marina Del Ray in Los Angeles and Place Victoria in Montreal, and the ICOS Corporation of America which specializes in foundation construction.

Boston is also contributing $12 million in federal money from the Economic Development Administration, the Bureau of Outdoor Recreation and an urban development action grant.

The renovated Navy yard, where British soldiers landed two centuries ago to fight the colonists at the Battle of Bunker Hill, also will tentatively include a hotel, townhouse condominiums, and a marina with 450 to 500 boat slips.