A former mental asylum is set to be transformed into 200 new homes.
St John's Hospital, in Bracebridge Heath, was first opened as the Lincolnshire County Lunatic Asylum in 1852.
But it has stood empty and derelict since it was closed in 1989.
Property development firm Mabec is now putting the finishing touches on a planning application which would see the site completely renovated.
If approved, the grade-two listed Victorian building will be transformed into 64 houses and 42 self-contained apartments.
There will also be 68 new houses and 30 "senior living" properties built in the hospital's ten-acre grounds, bringing the total number of new homes to 204.
The cost of the project is currently unknown due to severe damage and dry rot throughout the hospital building, although developers expect it to be in the tens of millions.
Mark Elliott, director of Mabec, said that a housing development was the best-possible solution for the site.
He said: "We find that any piece of land has one right solution and we really think we've got it with this one.
"Its only practical use is as a housing development.
"We bought the site in December after the previous development company that owned it went into administration.
"Since then, we've done three lots of public consultations on the site with residents and the council and it's all been very positive. In fact, it's been the best consultation period I've ever had as a developer."
The houses and apartments will range between one and five bedrooms and come with gardens and parking. The project itself has been given a working name of St John's Village.
While plans are still being finalised for the development, Mr Elliott confirmed that they would include the removal of the hospital's water tower.
He said: "We have a beautiful listed building and we want to work with what we've got.
"The idea is to change as little as possible unless it is clearly an eyesore – and that includes the water tower.
"It overshadows just how wonderful the building is and I won't be able to sell houses with it there.
"But even if that wasn't an issue, it doesn't have long left to live anyway so now is the right time to take it down before it becomes dangerous."
Paul Stafford, 37, from Chichester Road, in Bracebridge Heath, said: "Hearing that they want to keep a lot of the features and respect the building is brilliant. I bought my house knowing that it was next to the St John's site and knowing that the chap who owned it before had plans similar to this. The building suits a housing development so well.
"I agree that the water tower has to go as well because it is an eyesore and it's not going to suit anything that they want to do with the place."
Planning permission will be submitted to North Kesteven District Council.
If approved, workmen could be on site for the first phase of the development by the end of the year.