Morgan Sindall has replaced ISG on a job to build a new leisure centre in Bishop Auckland.
It is the second time this month the firm has picked up an ex-ISG contract.
The leisure centre build had faced delays after ISG went into administration last September leaving 2,200 workers redundant.
Plans for the £26.6m project were originally approved in 2023.
At the time of its collapse, ISG had not started work on the development, which will see the current Woodhouse Close Library being demolished and the new facility replacing it.
Durham Council said Morgan Sindall will start work this summer.
The new building will create a community hub bringing both leisure services and the library together in one place, along with a new soft play centre and cafe.
It will include two accessible swimming pools, a sauna and a steam room. There will also be a gym, alongside two new purpose-built group exercise spaces.
Councillor Joe Quinn, cabinet member for resources, investment and assets, said: “We are delighted to soon begin work on the new leisure centre for Bishop Auckland following the appointment of the contractor.
“The project is part of our leisure transformation programme to modernise leisure facilities across the county as well as our ongoing regeneration of the town.”
The leisure centre is being funded by Durham Council, with a contribution of £2.75m from Sport England.
It is the latest project to find a replacement contractor for ISG.
Earlier this month, the Department for Education appointed Morgan Sindall to finish an ISG job to rebuild Hempland Primary School in Heworth, worth £10m. Concrete foundations and the steel structure of a new two-storey building had already been put in place at the site on Whitby Avenue at the time of the contractor’s demise.
The Bishop Auckland leisure centre job represents another windfall for Morgan Sindall, which also picked up a £65m life sciences contract in London’s Docklands that had been lined up for ISG, although the contract had not been signed by the time administrators were brought in.
Morgan Sindall expects its full-year results to be “significantly ahead” of previous projections, on the back of the robust performance of its fit-out and construction divisions.
In a trading update earlier this month, Morgan Sindall, which ranked second in last year’s CN100 index, said it expected its full-year results for 2025 to be “significantly ahead” of previous projections, on the back of the robust performance of its fit-out and construction divisions.
The firm topped May’s monthly contracts league table, having taken 18 jobs during May worth a combined £619.6m, outstripping its nearest rival by more than £200m.
The firm’s biggest contract last month was for a £130m revamp of the National Sports Centre in Crystal Palace for the Greater London Authority.
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Nicola Harley