The owners of the vacant Mindel House in Manchester city centre have secured planning and listed building consent to convert it into a 300-bed backpacker hostel.
The four-storey grade II-listed building on Minshull Street, within the Canal Street 'gay village' area, has remained largely vacant for a number of years.
Despite efforts to market the property, a commercial end-user could not be found so the owner, Balderton (Mindel) LLP, said they were compelled to explore other options.
Now the owners are in advanced talks with a potential operator, Visitjourneys.com, to agree a deal in the coming weeks.
Mindel House would be Visit Journeys' first venture into the North West market and one of the largest backpacker hostels in northern England. Visit Journeys operates in London and Brighton.
Manchester-based planning and development consultancy Hourigan Connolly led negotiations on behalf of the building owner with the city council on the planning and listed building applications.
Richard Lomas, senior planner at Hourigan Connolly, said: "Being a listed building, the technical planning issues have been challenging but the end result is well worth the effort.
This investment in Mindel House will help to secure its future and provide the type of tourist accommodation that Manchester is lacking. It is an ideal location being in close proximity to major public transport hubs, attractions and nightlife. Hopefully the influx of visitors will also help to support local businesses."