Cardiff council has selected the Brains Brewery site as its preferred option after reviving plans for an 11,000-seat arena.
The local authority is in discussions to relocate the brewery in order to free up the eight-acre site it currently occupies to the south of the city’s central station.
The scheme would become a major attraction in an area which has already become a focal point for development in the city.
Cardiff council is expected to lead the development alongside a contractor.
Last year, the Brains site – where the brewer has been based since 2000 – was one of five sites considered for the development of a new convention centre, which would have seen the government back the project with public sector funding. The council had planned a £150m project featuring the arena and a 1,500-delegate convention centre.
However, the Welsh government instead agreed to back the £70m Wales International Convention Centre at Celtic Manor in a bid to meet its 2020 target to improve tourism.
With capacity for 4,000 delegates, the Newport site is now expected to open in 2019, forcing the council to ditch its own plans for a competing convention centre.
The Brains site would be expected to sell for around £15m on the open market, but this is likely to rise as the area around the brewery is undergoing major redevelopment.
Immediately to the north of the site, Rightacres and the city council are pursuing a 1m sq ft mixed-use project which will be home to BBC Cymru.
Network Rail also has a plan for a circa 340,000 sq ft mixed-use development adjacent to the Brains site.
A spokesman for Cardiff council said: “Given the government support for the convention centre at Celtic Manor, Cardiff will now concentrate on delivering an international multi-purpose arena, as we recognise the need to have a dedicated convention facility.”
County Hall in Cardiff Bay, the Red Dragon Centre in Callaghan Square, and a vacant site behind the Wales Millennium Centre were also shortlisted for the initial project, and have not been formally ruled out as arena locations.
