The UK’s biggest building society said the new unit will create 750 new jobs.
Nationwide said it will open a digital innovation hub in London that will house 1,000 of its cutting-edge technology staff.
The country’s biggest building society said the investment in the Post Building in Holborn, follows an announcement made last September that it would spend an additional £1.3bn in technology over the next five years - totalling £4.1bn over the period.
Nationwide, which has 15 million customers, said the new building will create 750 new digital roles and will recruit these posts “over the coming months”.
The firm said the new building will house its Digital and Technology Innovation Centre and will cover data, engineering, architecture, development operations and design.
The site will also house Nationwide’s new small business banking unit, following the building society’s £50m award in May to increase competition in this area, which is part of a series of grants paid for by Royal Bank of Scotland.
The building society said the new office will complement its existing Swindon technology site, which employs around 700 staff.
The growth of digital banking over the last decade, with improved customer services, has spurred high-street banks and traditional financial services firms to boost their online operations.
Nationwide chief executive Joe Garner said: “We now have over four million digitally active members, and that number is growing all the time as each week and month passes.”
He added: “We are excited to be returning to our roots in Holborn, where we were once headquartered back in 1894. All of our market analysis demonstrated the new location is the best place to attract industry-leading talent within the fintech capital of the world.”