The historic former theatre is set to make way for a driverless vehicle testing centre as part of plans to continue the regeneration of the town centre. A 'university park' will also be created nearby.
Council chiefs are keen to get rid of the Hippodrome building and insist there are no viable options available for preserving the Castle Hill relic, following calls from campaigners for it to be saved.
The saga over the future of Dudley Hippodrome has dragged on for more than a decade. The Dudley Driverless Vehicles Consortium looks set to be given the nod to create a testing centre on the site.
However, a new council report revealed planning red tape means it could take two years to bulldoze the Hippodrome.
The report said: "Early pre-application discussions have commenced with Heritage England on the principle of the demolition of the building.
"However, although initial indications are positive, any support would be ultimately dependent on the quality of the replacement buildings and it is likely that planning permission would need to be granted and the contract to build let before any demolition could occur. This process could take 18 to 24 months."
Council bosses reiterated their belief that knocking down the former theatre, which was last used as a bingo hall in 2009, is the most sensible option for the town. The authority spent £13,000 between April and August making sure the site was secure.
The report said: "It is fully acknowledged that the Hippodrome is itself a heritage asset (though not statutorily listed) by virtue of its history and siting. It is also fully acknowledged that there has been, and will continue to be, objections to the removal of the Hippodrome from locals and the Theatres Trust.
"However, it must be borne in mind that the building has not been used as a theatre since the 1960s. Much work has been done to produce and consider business plans for the site to return to this use and none have proved viable."