Nearly half of Google's 150 employees in Canada work in the Waterloo, Ont., office, which is moving to Kitchener.

Google is moving its Waterloo, Ont., office to nearby Kitchener to match growth in its engineering team.

The search giant, based in Mountain View, Calif., has signed a lease for office space at the Lang Tannery in downtown Kitchener, a city of about 200,000, and expects to move in this year.

"The Kitchener-Waterloo downtown area is going through a huge revitalization and we are happy to be a part of a creative high-tech community," said Steven Woods, engineering director for Google Waterloo, in a statement.

Kitchener Mayor Carl Zehr was pleased by the announcement.

"Google's decision to locate their Canadian head office in downtown Kitchener is a strong signal of their confidence in our vision for a re-energized downtown that is quickly becoming home to the talent and the economy of tomorrow," he said in a statement.

Google launched its presence in the region in 2005 with the acquisition of Reqwireless, a small firm started by University of Waterloo students that was devoted to developing mobile phone applications.

The operation has since grown to 70 employees, mostly engineers and nearly half of the company's Canadian total, who are working on various Google projects including the upcoming Chrome operating system, HTML5 programming language and Buzz social-networking service.

In 2007, Google moved into Tech Town, an industrial park located just north of the university and next to BlackBerry maker Research In Motion.

The move downtown will allow engineers, some of whom live in the Greater Toronto Area nearby, to commute easier, a spokesperson for Google said. The company is also "aggressively" hiring, so it needs more space, she said.

The announcement follows last week's appointment of Chris O'Neill as Google's new country director for Canada. O'Neill will oversee Google's employees in Toronto, Montreal and Ottawa, but the engineers in Kitchener-Waterloo will continue to report to engineering vice-president Stuart Feldman in New York.