A notice served by the council on an NHS trust calling for the site to be cleaned up has been backed by the courts after it was appealed by health bosses.
The eyesore site on Compton Road can now be revamped following the long court battle between the council and the trust, which was criticised for allowing it to fall into disrepair.
Trust bosses had been ordered to bring the derelict building back to an acceptable standard but refused and lodged an appeal.
The eye infirmary, which has stood empty since 2007 when services moved to New Cross Hospital, has since been sold by the trust but the ruling clears the way for the new owners to transform the site.
The disagreement over who should be responsible for rescuing the site led to an unsavoury dispute between two key city authorities being played out in public.
New owners BZ Property Holdings described the ramshackle site as “dangerous” and said it was an “accident waiting to happen”.
The judgement stated changes must be made to the infirmary including re-glazing windows visible from the road and replacing parts of the roof.
However, with BZ planning to redevelop the site, the company said the repairs may not be necessary and that it was in talks with the council over the next steps.
Plans, which are expected to feature residential, are due to be lodged in the next six months.
Images captured by drone earlier this year showed the scale of disrepair, revealing a split in the brickwork of the iconic clock tower, holes in the floors and collapsed ceilings.
Wolverhampton Council’s economy boss Councillor Harman Banger, said: “We are pleased with the verdict. We are disappointed the Royal Wolverhampton NHS Trust appealed the notice and very glad it has been upheld by the district judge with only very minor amendments.
“Dating back to 2007 the trust failed to secure and maintain the premises and at no time did it submit a planning application for the site. We are now looking forward to the regeneration of this site.”
Zed Ahmed, from BZ, said: “We are working with the local authority on some new designs. We are looking forward to getting everything done.”
The trust came under fire during the court hearing. Ms Alison Ogley, acting on its behalf, stated it did not have a statutory duty to “protect, preserve or maintain” any of its buildings.
But the council’s John Beesley insisted the trust had a “moral responsibility, as a responsible public body”.