A former bus depot once earmarked for a five-star hotel and conference centre is now set to be developed as student flats complex.
The owner of the Southgates bus station, off Peacock Lane, Leicester, said the economic downturn had forced it to rethink its plans.
Developer Applegate said there was greater demand for good-quality student accommodation than for upmarket hotel rooms.
Its scheme would have 435 flats, housing nearly 700 students.
The bus depot closed in 2009 and has since been used as a car park.
Lee Staniforth, of city firm Staniforth Architects, which has drawn up the plans, said: "There was some early interest in the hotel idea but it did die away and the money wasn't there to do it.
"The money is there for the new plan. It will be done, if we get permission.
"Our aim is to be ready for the September 2014 university intake. The demand for student accommodation is still there but what we build will be designed so that in the future it could be converted for people such as key workers."
Mr Staniforth said the designs would fit in with mayor Sir Peter Soulsby's nearby £4 million Jubilee Square scheme and the proposed £3 million Cathedral Gardens revamp on the other side of Peacock Lane.
The design incorporates the last remaining part of the old depot – the entrance arch.
Mr Staniforth said: "That arch is lovely and we initially thought we would donate it to the Midlands Transport museum.
Then we realised we would be missing a trick because it would make a great gateway to a public square opposite Cathedral Gardens.
"We are also looking at acquiring an old double-decker bus to turn into a cafe. That's a bit of a nod to the heritage of the site.
"We hope the scheme will bring a bit of life back to the area, which at 6pm most night feels a bit dead."
A small supermarket is also part of the proposal which includes re-establishing a public route along Southgate Street which disappeared when the depot was built.
Applegate marketing manager Rupinder Nanuwa said the development would have a "positive impact" on the city centre.
Leicester Civic Society chairman Stuart Bailey said: "I'm impressed by it.
"It is a good design and, importantly, it is right next to De Montfort University's campus.
"It's a large site so it can take a large number of flats. That's no problem.
"It's clear the original plan was always going to fall victim to the economy and I believe it's better to have some investment there rather than keeping it as a car park."
Sir Peter said: "It will, of course be down to the planning committee to decide on this, but there are a number of sites along the inner ring road in need of development and I want to encourage investment."
