Longridge building companies W Monks and S&N Forshaw are putting together joint plans for up to 400 units on the 50-acre Grimbaldeston Farm site on the outskirts of the town.
The consortium, which owns the land, believes the site could be developed to create between 250 and 400 homes for the local population, including houses for first-time buyers and retirement homes for the elderly.
W Monks and S&N Forshaw have been in conversation with Ribble Valley Council planners over the proposals as well as opening negotiations with a housebuilder.
Preston-based PWA Planning and town planners JWPC have been appointed to look at the potential for the site with a view to submitting a planning application in the coming months once a housebuilder has been secured.
Crucially, the site is to the south of the town centre and, the planners say, would have less impact on the community than other proposed development sites to the north of Longridge.
Paul Walton, director of PWA Planning, said: "The landowners have been promoting the area as a suitable and sustainable location for development through the development plan process.
"The Core Strategy, as it emerges, provides for increased numbers of new houses in Longridge during the plan period, and we believe this site has considerable merit in meeting these needs."
Neil Forshaw, one of the landowners, said: "Grimbaldeston Farm is owned by Longridge people, who live and work here and who recognise the challenges the community faces when it comes to meeting the housing needs the council has been charged to meet.
"We believe the site offers a solution to the local authority that will have less of an impact on the community and could provide affordable housing for local families and for the elderly, which is much needed."