Allerdale Borough Council and Cumbria County Council are to start marketing the former Royal Naval Armaments Depot at Derwent Forest, Broughton Moor, for development into a leisure attraction.
The two councils have agreed a funding package with the North West Development Agency to buy the 1,050-acre brownfield site from the Ministry of Defence and cover the cost of site maintenance and marketing.
Ian Haythornthwaite, executive director of resources at the NWDA, said: "The agency is very pleased to have agreed terms with Allerdale Borough Council and Cumbria County Council regarding the acquisition of the Broughton Moor site.
"These terms include the agency covering the site maintenance and security costs for a period of three years, together with assistance in marketing the site for development. If after this time a developer has not been found, Allerdale Borough Council and Cumbria County Council will either retain ownership of the site or sell it on the open market.
"With these foundations in place we can now shape our plan to market the site and realise the shared vision of a vibrant mix of leisure, residential, business, outdoor and academic uses in one of the most beautiful settings in the country."
Bob Pointing, chief executive of urban regeneration company West Lakes Renaissance, added: "This decision is another important milestone in the regeneration of the Derwent Forest site.
"West Lakes Renaissance is pleased the project remains on track and now looks forward to the official handover of the site and a new impetus in transforming the former armaments depot into a high quality mixed development.
"There is still a long way to go, but partners can now kick start the plan to market the site and, most important of all, find the right development for the site."