Carlisle-based developer Story Homes has applied for permission to build 197 new homes on the abandoned Lancaster Moor Hospital site.
Planning and design consultancy Barton Willmore has submitted a reserved matters planning application to Lancaster City Council on behalf of the developer for the new houses, which will cross-fund the conversion of the grade 2-listed former psychiatric hospital.
The application includes details for the 197 new three and four-bed homes, a mix of terrace, semi detached and detached properties including areas of public space and a new village green.
Story Homes and North West restoration specialists PJ Livesey won a £67.8m contract from the Homes & Communities Agency last year, following a bid to take on the restoration of the Victorian hospital, which closed in 1999. The site already has outline planning permission for 440 homes.
This will be the first Story Homes development in Lancashire.
Steve Errington, managing director at Story Homes, said: "Developments such as this bring much needed quality housing to the area, they boost the local economy in terms of new jobs and they have a positive effect on the supply chain."
Vincent Ryan, associate at Barton Willmore, said: "These homes are an important first step towards bringing this site back into use and creating a new community for Lancaster.
"As well as providing housing for the area, the project will also secure the restoration of the fantastic hospital building for future generations to enjoy."
Deborah McLaughlin, HCA executive director for the North West, said: "It's brilliant that the planning application has been submitted and we are pleased to have appointed Story Homes for this project. This is a high profile development which will bring the site back to life, create new jobs and benefit the local people in the area."