Locals call it the Hammer, and when the €40m Herzog & de Meuron-designed extension to Duisburg’s Küppersmühle art gallery is complete in 2011 the west German city will have an architectural icon to rank with London’s Tate Modern or Munich’s Allianz Arena, both dreamed up by the same architects. The audacious design places a translucent box atop preserved grain silos alongside the existing museum, itself a Herzog & de Meuron conversion of a dockside mill. Clearly visible from the A40 autobahn that skirts the city to the north, the Hammer will act as a powerful magnet to the curious, inviting visitors to turn off and check out this industrial metropolis at the western end of the Ruhr river.

If they do, they may be surprised at what they find, for Duisburg isn’t pinning all its hopes on one icon. When they’ve completed their inspection of the Küppersmühle’s post-1945 German art, design-savvy visitors will find much to admire: the Küppersmühle extension is the icing on the cake of a long-term strategy that has already delivered an impressively revitalised dockside quarter – the Innenhafen or Inner Harbour.

Duisburg needed the boost. The city faced the same challenges as other ‘rustbelt’ cities, as old heavy industries declined, taking traditional working-class jobs with them. In the 1980s, employment in coal and steel collapsed; Duisburg lost 80,000 jobs in the space of a decade. The population – currently around half a million – continues to shrink by 4,000 a year, and Duisburg languishes at the bottom of the regional league table for unemployment. But it isn’t all bad news: it remains the world’s largest inland port, and, thanks to its position where the Rhine meets the Ruhr (and the A40 meets the A3),, it has developed into western Germany’s most important logistics centre, with 2,500 jobs at the 265ha Logport complex on the site of a former steelworks by the Rhine. Smaller in scale, new white-collar and high-tech jobs have nevertheless been a significant part of the fight back, not least in helping to change Duisburg’s smokestack image. It was a project to build a microelectronics centre that first brought British architects Foster & Partners to Duisburg at the end of the 1980s; the practice won the international competition to produce a master plan for the Innenhafen in 2001 and in 2007 was invited to master plan the rest of the city centre.

Regeneration hasn’t come at the cost of erasing Duisburg’s existing urban character. The Innenhafen’s agreeably gritty look survived the harbour’s reinvention as a flourishing residential, commercial and leisure quarter. A strikingly modernist dockside park by Israeli landscape artist Dani Karavan keeps the local rabbit population happy, if not lovers of conventional flowerbeds. And while, in time-honoured dock revival fashion, former warehouse buildings have found new life as offices, restaurants or bars, there has been no attempt to make the gaunt structures look twee or picturesque.

The Innenhafen is now well advanced, but the rejuvenation of the city centre has further to go. The Foster plan envisages new public open spaces and a 25% boost to the inner city’s residential population, with landmark buildings to strengthen its visual identity. A new urban focus has been provided around König-Heinrich-Platz, where the elegant neoclassical theatre fronting the square has been refurbished and a new philharmonic hall built alongside it as part of a multipurpose leisure complex, the CityPalais.

For all the Foster plan’s ambition, public money is scarce. Like many German cities Duisburg is heavily indebted, so commercial development is vital to maintain momentum. In September 2008, Dutch developer Multi Corporation opened the 57,000m2 Forum Duisburg shopping centre on a prime site facing König-Heinrich-Platz. Reversing the out-of-town shopping trend that saw neighbouring Oberhausen replace its city centre with a giant mall, Multi brought quality retailers back into the heart of Duisburg’s faded shopping precinct, with a Karstadt department store and a Saturn electrical and audio outlet as anchors. Equally significant is the architectural quality of the Forum. As Multi’s research director Dr Herman Kok puts it, Duisburg may be no UNESCO-listed beauty, but it’s increasingly worth a visit – as thousands of shoppers, who previously eschewed it for Oberhausen or Düsseldorf, have discovered to their delight.