NEWQUAY TOWN COUNCIL has struck a deal to buy the derelict bus station site in the centre of Newquay, the Cornish Guardian understands.
Business leaders in the town believe that the move could be a crucial catalyst for further regeneration in the town.
On Wednesday a spokesman from property company Miller Commercial confirmed that a "sale has been agreed on the site subject to contract", which had not been finalised yet.
The potentially lucrative site – once earmarked for a £5 million development – is also listed on the company's website as "under offer", at a guide price of £650,000.
Members of the town council have been holding discussions about the site in the private sessions of monthly full council meetings since August.
Mayor of Newquay Andy Hannan neither confirmed nor denied the council was buying the site but said an official announcement would be made on Friday.
Andy Cole, a Newquay BID director and chairman of the Newquay Regeneration Forum, felt the deal has been a long ambition of the town council.
He said: "They've been trying to do it for ages. Anything done on that site will be brilliant and could kick-start regeneration in the town.
"The forum members will look forward to working with the town council on this site."
The site has laid derelict for some time despite being proposed for a £5 million retail and residential development.
The owners of the site, London-based company Aedifico, even had planning permission for the project which included 28 flats and a 12,000sq ft retail area with parking.
It was understood to be the proposed location of a Marks and Spencer store but the idea never gained momentum and the site was left to ruin.
Plans for the development also included a modernist design on the old bus station site in Trebarwith Crescent.
In June 2009, Aedifico was insisting the development would go ahead, despite the difficult economic climate, although it was looking for a partner to help fund it.
But in July this year, Truro-based Miller Commercial said it had been instructed to seek a buyer for the site at a knock-down price of £650,000, thought to be a lot less than what Aedifico paid for it.
Popular opinion in the town is that the tourist information centre and council offices will be moved to the building with office space or flats above.
The site is currently surrounded by hoardings featuring art by Newquay activists My A'th Kar Newquay.