The Open Market in Brighton looks likely to be refurbished after Brighton and Hove City Council granted planning permission for the project.
The council cabinet will hold a special meeting on Monday (28 February) when it is expected to approve funding for the scheme.
The council and Hyde Housing are due to create 44 stalls plus workshops and a central square in the market off London Road.
The main funding for the scheme will come from the building of 87 “affordable homes”.
They are between one and six storeys high – about the height of the nearby Co-op building, the council said.
Building could start in about a fortnight’s time – not least because Hyde’s funding is conditional on the first spade going into the ground by the middle of next month.
The scheme is expected to be completed within two years.
In the meanwhile a temporary indoor market will be provided on the site.
Councillor Lynda Hyde, chairman of the council’s planning committee, said: “We approved this plan because it brings in millions of pounds in investment, creating a potentially wonderful new market to help regenerate London Road.
“It will also provide dozens of energy-efficient homes for local people.
“It will be tremendous to get another major development off the ground alongside the new Amex HQ and Falmer stadium.”