Plans to relocate Peterborough City Council staff to a flagship development at Fletton Quays are being investigated.
The shake-up could result in Bayard Place being vacated then turned into homes, but the council has stated that Town Hall will not be sold off.
Any decision is not expected to be made until next year with councillors getting the final say.
The outline application of the £120 million development of the derelict Fletton Quays site was handed into the council last month.
The application included plans for 265 luxury apartments, restaurants, a 160-bed hotel and two blocks of offices.
The South Bank site between the River Nene and the Peterborough to March railway line has been described as a carbuncle by the council’s leader, Councillor John Holdich.
Next week Cllr David Seaton, cabinet member for resources, is expected to agree the transfer of Fletton Quays and Pleasure Fair Meadow car park to the Peterborough Investment Partnership (PIP).
The council set up the PIP in December 2014 to take forward a number of sites initially through the planning process, then to secure an investor to implement the physical redevelopment.
If the relocation goes ahead the council will become an anchor tenant on the site and will utilise, in part, the listed railway sheds to build state-of-the-art energy efficient offices for staff.
Officers are investigating the viability of the move before putting the decision before councillors.
The council has stated that any future relocation plans would not result in the sale of Town Hall in Bridge Street and that the civic functions of the building will be retained.
Work is also underway to establish whether it is practical to relocate the Customer Service Centre to Town Hall which would enable nearby Bayard Place to be vacated.
Opportunities to convert Bayard Place for an alternative use, including converting it into homes, are also being investigated.
Cllr Wayne Fitzgerald, deputy leader at the council, said: “The recent progress to regenerate Fletton Quays is encouraging and I am confident that these plans will lead to the regeneration of the area with a mixture of leisure, office and retail facilities.
“We are now carrying out detailed work into the costs of moving our back office to Fletton Quays - but the proposal must be financially beneficial to the council and the city as a whole in the long-term or it won’t happen.
“It’s also important to make clear that the Town Hall wouldn’t be sold and would be retained as the democratic heart of the city - however, it is possible that some of the office areas could be leased for other uses.
“This is an exciting time for Peterborough. We are the second fastest growing city in the country, the amount of investment is increasing and new businesses starting up have hit record numbers.
“Fletton Quays has sat empty and unused for too long and the planning application submitted by PIP is a very important one for the future of the city.”
Following the transfer of Pleasure Fair Meadow car park in Oundle Road to the PIP it will continue to operate as it presently does until regeneration plans are sufficiently advanced to require it to be vacated.
The council has already reduced the number of offices it uses in order to save money, with officers no longer working in Bridge House, Laxton House, Midgate House, Cavell Court, Stuart House or Northminster House.
The PIP is a joint venture between the council and Lucent Strategic Land Fund.
The council transfers the land into the partnership and Lucent the funding, and then when a site has gained planning permission it will be sold and both parties take a share of the profits.
Any profit is divided proportionately between the council and Lucent according to each party’s contribution to each scheme.