The Inverness College UHI site has been acquired by developer McCarthy & Stone, along with the Highland Council, with plans in place to deliver over 80 new retirement homes.
McCarthy & Stone will build 45 homes on the vacant campus, with the council delivering 40 'affordable' retirement homes.
The Midmills site became available when the College relocated to its new facility on the Beechwood Campus in 2015.
Demolition work on all non-listed buildings will get underway next month, clearing the area for housebuilding work to begin.
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The remaining Inverness Royal Academy building will be converted by Wasps Studios into a studio and art gallery for local artists. It is estimated that 150 construction jobs will be created by the project.
Anna Tozer, strategic disposals manager at the Scottish Futures Trust, said: "We've secured a very positive outcome for this site which ensures much-needed retirement homes will be built. Securing the architecturally significant Inverness Royal Academy building for the local community to use and enjoy as an art facility is a real bonus, helping safeguard its future."
John Hill, development director at Lambert Smith Hampton, which helped negotiate the sale of the site, said: "This is an excellent example of how private developers and public bodies can team up to provide innovative funding solutions that deliver private and social housing, while ensuring that the listed buildings remain in beneficial use.
"The scheme designed by McCarthy & Stone delivers a quality new build development that is sensitive to the setting of the listed buildings and surrounding neighbourhood."
(LM/MH)
