The Homes and Communities Agency has bought Wolverhampton’s former Royal Hospital site from Tesco.
Bowmer and Kirkland was lined up to redevelop the site for the supermarket giant creating a flagship superstore in the heart of Wolverhampton.
But the £65m redevelopment was pulled at the start of last year while B&K was stripping out the buildings after Tesco suffered a sharp downturn in sales.
The 12.5 acres, which also comprises the former bus depot and further development land, will now be developed out by the HCA.
A fresh scheme will be predominately residential-led with a possible new campus for Wolverhampton College, utilising the listed former hospital buildings.
Karl Tupling, the HCA’s executive director for the Midlands, said: “We look forward to working in partnership with the City of Wolverhampton Council to secure a planning consent on the site which will deliver much needed housing, including starter homes, and potentially a new campus for the college.
“We believe the Royal Hospital site will transform this gateway into an inviting new approach into the city centre.”
A Tesco spokesperson said: “We’re pleased to announce the sale of the former Royal Hospital site to the HCA, which will bring forward investment for both the local community and the City of Wolverhampton.”