More than 700 new homes could be built in Wednesbury if senior councillors back a joint plan by Sandwell Council and the West Midlands Combined Authority (WMCA).
Cabinet members are being asked to approve a scheme that will allow the purchase of a former sewage works near to Friar Park and Bescot as the first step in building 750 houses.
If a deal is agreed, a masterplan for outlying planning permission will be drawn up.
But council officers warn significant remedial work would need to be done before any homes could be built because the site is known to contain sewage sludge up to seven metres deep with potential gas production and contamination from heavy metals.
The proposed Bescot/Friar Park redevelopment is approximately 26 hectares and close to the border with Walsall.
Sandwell owns the majority of the land while 12 hectares is owned by Severn Trent plc.
Previous attempts by the council to reach an agreement with the company were not successful and the WMCA’s support is seen as essential for the scheme to go ahead.
A report to councillors says the scale of the site presents an opportunity to transform the area.
Urging cabinet members to back the plan, it states: “It is considered that without the intervention of the WMCA funding, which secures both the acquisition and the remediation, the potential for the comprehensive redevelopment of the site and the opportunity to dramatically increase the quality and pace of housing delivery in the region could be significantly reduced.”
The cost of buying and treating the land have not been made public but housing officers estimate the development could see the council benefit from an £800,000 annual increase in council tax receipts.
Cabinet members will discuss the plan at their meeting on June 5.