A former primary school that artists had hoped to take over will in fact be sold for housing, The Courier newspaper has reported.
The Caledonian Road Primary School in Perth has been on the market for almost a year.
Pupils last took lessons there in 2009, before they moved into the newly-built Glenearn Community Campus.
Local artists from the Perth Contemporary Arts Trust had hoped to turn the school into an arts centre with studios and galleries but could not raise funds in time to make an offer on the B-listed building.
Now a council committee looks set to approve the deal to sell the 1892-built school to Caledonia Housing Association.
It is believed that plans are in place to convert the building into 24 new flats by 2015.
Perth and Kinross Council is set to fund the project with £200,000 and hopes to trigger Scottish Government funding, in an attempt to alleviate housing need in the area.
A meeting of the council's property sub-committee is expected to ratify the deal on Wednesday, behind closed doors.
A spokesman for the Perth Contemporary Arts Trust said the group would continue searching for a suitable site.
He told The Courier: ''We still believe there is a need for a contemporary art gallery in Perth with artist studio and associated workshop space. We know it's difficult for the council in these financial times to raise their eyes to the future but in our view it's the right time to be planning because these things don't happen overnight.''
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