Land at Bescot Sidings, adjoining Friar Park Road and Kent Road, has been vacant for more than 50 years.
Officers at Sandwell Council, which owns the land along with Midland Land Portfolio Limited, formerly Severn Trent, say preparing it for homes will boost the economy, address Sandwell's homes shortage and bring in additional council tax revenue.
As well as the main area, the site may incorporate a further 22 acres currently occupied by Phoenix Collegiate's north campus.
Midland Land Portfolio Limited has appointed specialist firm Northern Trust to drive the development forward for them.
A council report says the contaminated site "blights the landscape in the north of the borough" and redevelopment could, in the longer term, create more than 800 new houses, remove a vast area of underused land, and significantly regenerate the local physical environment."
Once reclaimed the site will provide 33 hectares for a combination of residential and public open space with potential for up to a 1,000 homes. Councillors are due to discuss plans on Wednesday.