Council leader Ian Brookfield said the authority would have to take a "long hard look" at the situation surrounding the iconic building and the reasons why the university pulled out and insisted no-one wanted to see it lying empty.
Buyers for Beatties are once again being sought after university leaders walked away from the deal due to the large costs that would be needed to bring the Victorian building up to scratch. The Express & Star understands there are several other parties interested in the site, including residential developers.
Wolverhampton Council begun exploring whether it could snap up the site when it was put up for sale earlier this year but made way when the university came forward with its plans, which the authority supported.
Senior figures at the council have concerns about such an iconic site falling into the hands of developers who could then leave it empty for a prolonged period. House of Fraser will leave Beatties for the Mander Centre in the new year.
But Councillor Brookfield said that without external investment it was likely there would be nothing the council could do.
He said: "We are as disappointed as the university. We were supportive of their plans to renew Beatties. We're going to have to take a long hard look at some of the massive reasons the university is not proceeding. We're aware the state of the building is a huge issue.
"It is iconic, it is vital to the city centre and its history but we're in that type of situation where we're saying 'Hang on, why does nobody want to buy it?'
"It's difficult. We've got no immediate plans to stand forward in the university's place knowing what we know about the building, and that it would take a king's ransom.
"We wouldn't want to see it remain empty. We have a duty of care to our city centre. We need to go away and talk to government partners to see if, together, there is mileage in trying to do something."
The University of Wolverhampton unveiled its vision for Beatties earlier this year which included using part of the site for lectures but also keeping it open to the public and retaining a retail element. But it was confirmed this week that the deal was dead.
Council chief executive Tim Johnson said he wanted the future owners of Beatties to deliver a "viable, vibrant and timely" scheme to bring it back to life.
Mr Johnson said the university's vision for Beatties would have been ideal but insisted he understood the reasons for pulling out of the deal.
He said: "We’ve been supporting our university colleagues with their bid to acquire Beatties and I think it’s fair to say that, from a council perspective, they would have been a perfect custodian for this much-loved, 142-year-old, iconic building at the very heart of our city centre.
“Clearly, given the university’s excellent track record of redeveloping heritage buildings like the Springfield Brewery site, this is not a decision they have taken lightly, and unfortunately, it highlights the condition of this landmark building."
“The university’s very understandable decision does not change our position on Beatties. We want to see the building acquired by a reliable partner who will deliver a viable, vibrant and timely scheme for this iconic site as part of a re-imagined city centre benefitting from a billion pounds-worth of investment.
“We want what is best for our city and will be reviewing the situation to see how we can best support bringing the building back to life as quickly as possible.”
Meanwhile, West Midlands Mayor Andy Street said the collapse of the university takeover was "really disappointing news".
He added: "This would have been a fantastic solution to the future of this iconic building and its role in the future of Wolverhampton. Another plan is vital as the Beatties building is a critical asset for the city."