Swansea’s Palace Theatre was built in 1888 and welcomed the likes of Laurel and Hardy and Morecambe and Wise.
Since being left empty in 2006, it has decayed, been cordoned off and targeted by vandals.
Swansea Council, which recently bought the building, wants to redevelop it into a modern office space.
Potential business partners are also being encouraged to submit ideas on how they – as lead tenant for the council – would run or manage the Palace.
Its “existing structure and architectural aesthetic” would be maintained, Swansea council said, with the design and build programme expected to take about three years.
Council leader Rob Stewart said: “The Palace is one of the city centre’s architectural treasures and now that it’s in our hands we’re confident in its prospects.
“Our plan will help transform the High Street area – already benefiting from many millions of private investment – and will help our exciting regeneration work across the city centre.”
The Palace staged performances by stars including Charlie Chaplin, Sir Anthony Hopkins and Morecambe and Wise.
It was last used 13 years ago as a nightclub.
A private sector-led scheme to regenerate it began four years ago but grant support for redevelopment did not materialise.
Emergency repair work has been carried out but the building, which has three towers and rises to four storeys, is in an advanced state of dereliction, the council said.