Urban regeneration company New East Manchester has acquired the Rolls-Royce works on Pottery Lane in Openshaw.
The site will be vacated by the carmaker before the end of the year and cleaned up by NEM, following approval of a £3.6m grant from the North West Development Agency.
The Crossley Works site covers 8.2 acres and will become home to a "high quality, landmark development…which will complement adjoining sites, including The Manchester College and SportCity", NEM said in a statement.
The grant will pay for demolition, decontamination and preparation of the site. The redevelopment will be for employment or commercial uses, which tie in with wider plans for the area.
Mark Hughes, executive director of economic development at the NWDA, said: "Purchase of Crossley Works will ensure that future development of this site can be undertaken in a positive manner that complements the wider vision established for the regeneration of East Manchester.
"The objective of the project is to secure control and ownership of a strategically located site and to ensure a new development is created there that will promote and contribute to the employment aspirations of east Manchester."
Eddie Smith, chief executive of New East Manchester, said: "Purchase of the site is also consistent with our objectives to promote development on the inner ring road – incorporating Hulme Hall Lane through to Alan Turing Way through to Pottery Lane – as an Arc of Employment."