WANdisco, a provider of distributed software development solutions, said it is leaving the capital because of the competition for specialised jobs, expensive living costs, poor infrastructure and lack of space.

David Richards, the chief executive, said: "Sheffield has a fantastic quality of life due to its amazing green spaces and affordable grade A office space coupled with 15,000 skilled graduates from the two universities each year.

"Moreover, Sheffield is a central time zone which will make liaisons with key countries such as the United States and India much easier."

He added: "We are very excited about our move to Sheffield. We will be initially based at Sheffield Technology Park, however our aim is to move to Electric Works which is a purpose-built 21st century facility where we will be surrounded by like-minded people and businesses – providing an environment in which WANdisco can thrive.

"This will also enable us to capitalise on partnership opportunities. Sheffield's reputation for creative and digital industries is growing rapidly and we are glad to be maximising on this."

The Creativesheffield quango assisted with the move and sourcing of the premises.

James Wilson, the investment manager, said that five high-quality jobs would be created initially, possibly increasing to 50.

"We hope other businesses will follow suit to make Sheffield a real hub in this sector," he added.

WANdisco is based in Silicon Valley, in California, and has offices in Tokyo.