The North West Development Agency has awarded Burnley council up to £4.9m to acquire land and premises from four parties in the Weavers' Triangle area of Sandygate.
The NWDA said the acquisitions, made on both banks of the Leeds Liverpool Canal, 'encompass the single greatest concentration of heritage buildings within the wider Weavers' Triangle'.
Weavers' Triangle is one of the best preserved and most important Victorian industrial districts in the North West.
Under the council's sole ownership the site will be brought forward for a large mixed-use development.
Mark Hughes, executive director of economic development at the NWDA, said: "The Weavers' Triangle in Burnley town centre has real potential through making use of its rich heritage and canal-side location, to create a quality environment for new business investment, new jobs and other uses in order to diversify and expand the town's existing offer.
"Without intervention, this opportunity would remain in fragmented multiple ownership and the buildings that give the area its unique identity may be lost. The existing vacant sites and poor condition of historic buildings would remain as a major blight at a key gateway to the town, and an obstacle to its economic progress.
The sites and buildings bought are Victoria Mill, Sandygate Shed, Waterloo Hotel, Slaters Terrace and Engine House, Wiseman Street Yard and the former Clocktower Mill site owned by the Hurstwood Group; sites and buildings owned by Dexter Paint holdings; land to the north west on Trafalgar Street.
Steve Rumbelow, chief executive of Burnley council, said: "Over the next 18 months we will be putting together a prospectus for the site, so that when the economy is on the up we will be able to attract a new developer to join those already building new houses, new schools, retail and business parks, and who share our commitment to making Burnley a great place to live, work and invest."
Gordon Birtwistle, Leader of Burnley Council, said: "This is a turning point for the Triangle. An exciting scheme that should have already been developed now will be developed. For the first time in its history, the people of Burnley hold the keys through this bold buy-out. When the economy picks up we will be ready, and Weavers' will be ready, to attract developers and continue driving Burnley forward."
In addition to funding the acquisitions, the Agency's support includes a contribution – in conjunction with other heritage funding secured by the Council – towards the reasonable costs of repair and maintenance to secure the fabric of the buildings while they remain undeveloped and at risk of further deterioration. This work is expected to take approximately 12 months to complete. The Agency's grant will also support the preparation of a prospectus and development brief, which will be used to seek private sector investment in the opportunity, when market conditions improve.