ING Real Estate Development has agreed revised financial and legal guidelines with the local authority for the troubled Northgate retail project in Chester.
Cheshire West & Chester Council said the terms of the agreement were confidential and discussed in private by the executive this week.
The local authority did say it expected ING to submit a revised planning application for 580,000 sq ft of retail and leisure in autumn 2011 and begin construction in spring 2014.
A statement from ING Real Estate issued jointly with the council said: "We look forward to working in partnership with the Council and stakeholders to deliver a retail-led scheme for the Northgate, which will revitalise this quarter and re-establish Chester's national position as a top shopping destination."
A council report from resources director Julie Gill and Charlie Seward in regeneration said the original plans had to be revised to reflect the "current national economic situation and the large non-commercial elements included". The civic amenities in the project are expected to be removed or severely reduced.
The public element of the council officers' report said: "The clear conclusion is that for a scheme in Northgate to succeed, it must be a more commercial solution with a strong retail focus.
"The approach is supported by detailed research into Chester's retail offer including an evaluation of the opportunities and deficiencies of the city centre."
Cllr Mike Jones, Conservative leader of the council, said: "Whilst progress on this vital scheme has been slow, it is a significant sign of Chester's enduring attraction that we have a developer prepared to invest at a time when many other such proposed schemes in different parts of the country have either been abandoned or at a standstill."
ING is working with Land Securities on the project, for which it first gained planning consent in 2007. The original consent was renewed for a further three years last week.