Liverpool City Council has agreed a deal with Merseyside Pension Fund to buy a long lease on the Cunard Building for around £10m.
The council proposes to use the 285,000 sq ft Pier Head landmark, of which only 62,000 sq ft is currently let, for the check-in lounge for the cruise liner terminal.
Council departments including Liverpool Vision, the economic development agency, would also move into the building.
If approved by the council, the proposed deal would see the local authority acquire a 250-year lease but have the option to purchase the freehold after five years at no extra cost.
The building was bought by the pension fund for the sub-region's local authorities in 2001 from Prudential for £18.25m. The grade 2*-listed building is the former headquarters of the Cunard shipping line.
As the property market fell in the past few years the value of the building declined with it, from £17.75m in March 2010 to £15.5m in March 2011 and, according to annual reports published by Merseyside Pension Fund, less than £12.5m as of 31 March 2012.
According to a council report due to be discussed by cabinet members on 11 October, the key elements of its move into the Cunard Building would be as follows:
- Vacate and sell Millennium House in Victoria Street to a student housing or hotel investor
- Exercise break clause in the lease on the 10th floor of The Capital building in Old Hall Street, with around 100 Liverpool Vision and Marketing Liverpool staff relocating to the Cunard Building
- Relocate selected services and staff from Municipal Buildings to the Cunard Building
The council claims the moves will altogether reduce its accommodation costs by around £1.35m a year and generate rental income of up to £1.75m a year.
The deal will also negate the need to build a new home for the Cruise Liner facility, which is currently housed in a temporary structure on Peel-owned land in Princes Dock, with two years to run on the lease.
CBRE advises Merseyside Pension Fund and manages the building. CBRE and Hitchcock Wright & Partners are letting agents on the building.
Cllr Mayor Joe Anderson said: "This scheme will save the council a considerable amount of money, reduce the number of sites we occupy in the city centre and create a fantastic facility for the ever-growing number of cruise liner passengers coming to the city."
Around 200 on- and off-road car parking spaces near Cunard would also be taken over for use by visitors to and staff based at the building.
The council said the cost of the purchase of the lease will come from its reserves, meaning no borrowing costs or adverse impact on frontline services.
The Cunard Building was constructed between 1914 and 1917. It was the world headquarters of the Cunard Line until the 1960s. It was listed by English Heritage in 1965.
Merseyside Pension Fund declined to comment.