Updated

The building holding NATO's massive new headquarters will be a "new home for a new NATO," capable of tackling global challenges such as terrorism, piracy and cyber warfare, the alliance's leader said Thursday.

"A new headquarters building is essential for NATO to meet the demands of a rapidly changing security environment," Secretary-General Anders Fogh Rasmussen said at a groundbreaking ceremony in the new site for the compound.

NATO was formed in 1949 at the height of the Cold War, but has never had a purpose-built headquarters.

In 1966, French President Charles De Gaulle kicked the alliance out of Paris, complaining that it was dominated by the United States. NATO relocated to the Belgian capital, and temporarily settled into a decrepit military compound consisting of a rabbit warren of 1960s-era, prefabricated structures.

"Our old building has served us well, given that it was only meant to be a temporary solution," Fogh Rasmussen said. But the organization now needs "a new home for a renewed NATO."

NATO's new home — due for completion in 2015 — will be situated across the street from its current offices. Officials have complained the premises has become cramped in recent years, with the addition of new members and partner countries.

NATO has grown rapidly since the collapse of the Warsaw Pact, its Cold War foe, two decades ago. It has expanded from 15 members when it first moved to Brussels, to 28 today.

"We pledged to make the Alliance more effective in carrying out its missions ... and more engaged with the wider world to tackle global challenges, such as terrorism, proliferation and cyber warfare," Fogh Rasmussen said.

The new compound will cost euro480 million ($633 million) for the initial construction phase. Equipping and furnishing the new building is expected to cost an additional euro200 million ($266 million).

Critics, however, have pointed out that the long-awaited move comes at a particularly difficult time, amid sharp cuts in defense spending and while the alliance is bogged down in a costly war in Afghanistan.