The home, located at Murray Road, Inverness, was destroyed by a fire more than three years ago.
It is understood the local authority has secured the site through its Landback Fund. Following the conclusion of the purpose, the Council has now agreed to give the Elsie Normington Foundation a two-year option on the site to raise the necessary finance for a specialised play and respite centre for disabled children.
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If they are able to proceed, the Foundation could either buy the land outright, or rent the land from the Council at market value in order to ensure repayment to the Landbank Fund. If the Foundation was not able to proceed, however, the local authority has outline planning permission to construct 17 bungalows for older people.
Councillor Dave Fallows, Chair of the Finance Housing and Resources Committee, said: "I am delighted this deal has been concluded and that we are going to regenerate this site.
"Our first choice is to offer the land to the Foundation for the respite centre for disabled children, but we have a strong fall back option if the Foundation is not able to meet their fund-raising target."
(JP/MH)
