MORRISONS says plans to build a major new leisure club on the old Frontierland site are "a step in the right direction for Morecambe".
Bosses at the supermarket chain hope to submit a planning application to Lancaster City Council next month to create a new health and fitness centre and two stores on the derelict Marine Road site.
Roger Owen at Morrisons said "negotiations are well along the line" with leading names in the leisure and retail industries.
"It's a start, a step in the right direction for Morecambe and we will continue negotiations to fill the balance of the site," said Mr Owen.
John Donnellon, director of regeneration at the council, said: "It is very early days but we would welcome anything that will bring jobs in to Morecambe.
"We will look into whatever Morrisons has to offer – although we will not accept housing – but not rush into anything just for the sake of having something there.
"If they are looking at a proportion of the site and not all of it, we would still expect them to tidy up the frontage."
The Visitor reported in February how Morrisons was looking at alternative uses for the former Frontierland after struggling to find tenants for a proposed factory outlet centre.
The chain was granted planning permission in 2002, following a public inquiry, to build 56 retail units to sell a range of factory seconds and surplus stock at discounted prices.
"Ideally we would have liked the original plans to go ahead, but the market appears to have shifted away from that type of development," said Mr Donnellon.