Dudley Muslim Association is locked in a long battle with Dudley Council over a proposal for a mosque on land off Hall Street.
Earlier this month, the association won planning permission for the mosque.
But it faces at least two court hearings lasting at least two years before it can be built.
In an attempt to avoid the escalating court costs and resolve community disharmony caused by the proposal, Muslim leaders say they will consider alternative sites.
In response, council leader David Sparks has said he would welcome reopening negotiations about new sites, but said the council's current legal position remained unchanged.
Five years ago, alternative options including Dudley Hippodrome and incorporating Castle Casino as part of an expansion plan for the existing mosque.
Both ideas fell through.
With no other sites in mind currently, it will be down to both bodies to look for new locations as both look to bring an end to the saga surrounding the mosque.
Councillor Sparks said: "The legal position concerning the mosque has not changed.
"But we have always been open to any constructive discussion about alternative locations.
"It is for the Dudley Muslim Association to come forward with alternative sites and then we can discuss them."
Yesterday, Association director Dr Khurshid Ahmed said he would now be looking to arrange a meeting with Mr Sparks to plan a route forward.
The Muslim association and council are set to meet at the Court of Appeal in London next year for an appeal by the association against a court order allowing the council to buy back the land off Hall Street.
If the association was to win, the case would go forward to another hearing at the High Court in London, but this could take place as late as 2016.
Mr Ahmed said: "I am very pleased to hear he is willing to talk to us because it is only by talking and constructive dialogue that we will put an end to the issue."
However, Mr Ahmed said it was up to the council to come up with alternative locations, not the Dudley Muslim Association.
He said: "It is not for Dudley Muslim Association to come up with sites, the local authority is in a much better position.
"We have always been happy to talk to the council. The Dudley Muslim Association has been clear that we will accept a solution that meets our needs.
"But we have been given no viable alternative, so our only option has been to keep with the Hall Street scheme."