Cheshire West & Chester Council has approved the Gorse Stacks bus interchange for the next stage of development and is now procuring for a construction partner.
A meeting of the council's executive on Wednesday heard that the relocation of the existing bus exchange in Chester from Princess Street is a "key enabling project" in the £300m Northgate development.
The executive approved a recommendation for the development to move from the initial design stage to construction procurement, although planning approval and official confirmation of £13.5m Local Growth funding for the scheme is yet to be received.
Cllr Lynda Jones, executive member for growth and innovation, said: "It does mean a brief period where council funds are being invested at risk, but starting procurement at this stage will yield benefits of about two months in the programme of completing the interchange and free up the Princess Street site for the commencement of works on the Northgate scheme."
The meeting heard that £262,000 had been spent to date on design work and technical studies, and that the decision to move to procurement would release a further £767,000 to progress the scheme.
The application is expected to be determined by the council's strategic planning committee on 16 December.
Subject to approval, construction is due to begin in summer 2015 with completion scheduled for autumn 2016.
Mott MacDonald advised the council as transport consultant, and architect Austin-Smith:Lord designed the concept scheme.