Falcon House in the town centre has been left abandoned since being snubbed by supermarket developers who opted to occupy a different site.
But fresh plans have now emerged to convert the 1960s office block into accommodation.
Flats will be created at the dated building, but further details surrounding the proposals have yet to be revealed.
Initial plans requesting a change of use have been lodged with Dudley Council.
Falcon House overlooks public car parks off Flood Street and has seen better days. But its prominent town centre location would likely make it a sought-after destination.
The site had previously been earmarked for a huge £50 million regeneration plan featuring a supermarket, restaurants, shops and houses, but developers eventually chose Cavendish House as its preferred option.
Dudley Council's regeneration boss Khurshid Ahmed welcomed the plans to transform Falcon House and said planning officers would support developers in any way they could.
Bosses are desperate for more homes to be created in the borough and Councillor Ahmed said the town centre location would prove attractive to buyers.
The building is in the New Mill Gate area of the town, which the council has been keen to see redeveloped.
He said: "It has been empty for a long time. There is a big shortage of housing across the country and it is a priority of ours.
"That particular area has been identified for building residential accommodation anyway so it does fit in with those plans.
"More residential means more people in the town and more people in the town is better for businesses.
"Anything is better than having nothing there at the moment. Hopefully the planners will work with them closely and support them whatever the development is."
A decision on the proposed scheme is expected to be made by planning chiefs over the next few months.
Falcon House appeared to be on the way out when it was the supermarket plans were revealed in 2012 but was left standing when the scheme was altered.