Salford council is set to pull plans to sell a site to Urban Splash after local residents and councillors fought the development.
The council will look to retain the land at East Philip Street, giving the community a year to come up with the funds for initial site works prior to development.
The recommendations for the City Mayor will be decided on Monday 28 October.
Urban Splash was approved to acquire the 250-year lease for the former community forest garden for £250,000 on 25 March. The developer had initially planned to build nine townhouses as part of its HouSe product, but the site has a flood risk and development has been deemed unviable.
It then switched plans, seeking to create a landscaped public realm for occupiers at its Paradise Works studio space for artists. But the sale was called in by the council and rescinded within weeks.
Approval of the new proposals would give the community a year to raise £10,000 for the initial site works required to understand the level of contamination of the site. The council has said it is unable to pay for this, but has opted to capital receipt from Urban Splash, instead letting the local residents take charge.
Once the site works have been conducted the community will develop its proposals. The city mayor will then review the site after 12 months.
