The preferred developer will build 100 homes under a £15 million plan to transform the site. The development is part of the larger Morecambe West End masterplan funded by English Partnerships, which aims to attract a wider mix of residents.
Local people viewed a number of proposals earlier this year and gave comments that informed the final decision. Places for People commercial director Damian Southworth said: "Morecambe's position by the sea, close to Lancaster and the national motorway network, means that it has the potential to be a great place to live."
The developer will draw up plans with the aim of lodging an application next summer. If approved, work could start by the end of 2008.