Planners at Wolverhampton Council have given the go-ahead for an extension of the Old Ash Tree, on Dudley Road, as well as the creation of new shops and flats on the site.
The developer, listed as Mr H Pahal, said the pub had seen trade drop significantly over a number of years and the pub had been closed before the Covid-19 pandemic.
He added that the building is now in a poor condition after being empty for so long, while land at the back has become overgrown and a magnet for fly-tipping.
Work will include demolishing the current toilet block to make way for a two-storey extension to the pub and make it a more family- orientated business, with four flats created above.
A separate building will also be built on the site with three units for shops on the ground floor and several apartments being created above them.
Agents Sigma Homes Solutions Ltd said: “Currently the Old Ash Tree is closed for business and has been for a considerable amount of time even before the Covid 19 lockdown.
“The building and surrounding site has suffered, therefore. The applicant has indicated the downturn in trade for the pub was down to the general trend in society away from pubs of this nature and also the tired and dated interior.
“Although the interior could have been refurbished and updated the applicant feared this wouldn’t be sufficient to attract customers back to the pub and a more extensive plan would be required to help the pub back into activity.
“The proposed plans of extending the pub to create a more family orientated location is seen to be more in keeping with trends in society and should improve the likelihood the pub will thrive in the future.
“The existing residential accommodation above the pub is currently unused and has been for a while and going forward its unlikely to be used by either the applicant or manager of the pub, so its conversion into four self contained flats is an obvious choice and in keeping with neighbouring buildings.”
They added: “The new development will bring three key benefits to the area. Firstly the reopening of an important community meeting area and the preservation of a historic local building.
“Secondly the forming of new housing stock and thirdly a complimentary commercial provision in addition to the existing local centre of Dudley Road.
“We feel these benefits outweigh any potential negative impacts and therefore these proposals should looked on favourably.”