Translation:The university is in the middle of the city.
Most North American cities have a "downtown" which we say instead of city center. In Europe I hear "city center" more often. "Middle of the city" is a bit akward but I think it would be acceptable as an answer to a locative question; "its right in the middle of the city". "Heart of the city" sounds literary to me, and I wouldn't expect to hear it in casual conversation.
All three options work. The duo suggests has the least connotation: just the litteral middle. The "heart" sort of implies a certain vibrance and the "city centre" would imply something of a built up density. However these connotations are quite mild so all three are basically interchangeable.
Yes; as a native English speaker, (Scottish) I would say middle of the city/town. City Centre suggests the centre where the shops and banks and restaurants and hotels etc are; it is the busiest part of the city, and also the most expensive, therefore it is not where you would have a university.
There seems to be some confusion about this expression.
- Yliopisto on kaupungin keskustassa., neutral, normal description; the university is located in the area that is considered to belong the city centre in socio-economic whatever sense, but not necessary in geographical sense
- Yliopisto on keskustassa., shortened from the above; the most common expression, especially in speech, when the context is clear to everyone
- Yliopisto on kaupungin keskellä ., more emphasing, either in strict geographical sense or as a metaphore
- Yliopisto on keskellä kaupunkia., same as right above but interpreted by some to be even more emphasing
It seems to me that there are variations between different Englishes, so I leave to native speakers to figure how to express the main difference, the one between keskustassa and keskellä in their variant of English.