Dudley Council has submitted a planning application to knock the derelict 1930s-building on Castle Hill, which was last used in 2009 as a bingo hall.
Campaigners have fought for years to save the landmark Art Deco-style building - which once hosted comic legends Laurel & Hardy - but Dudley Council sees its demolition as integral to £1 billion regeneration plans for the town.
The plan to knock the old theatre down and replace it with a university park was revealed last year, and last week Housing Secretary Robert Jenrick visited Dudley where he confirmed a bid for £25m from the Towns Fund to finance the project had been successful.
As a result, the Conservative-run local authority has now formally submitted its proposals which will be subject to consultation and approval by councillors.
It has also been revealed that the education delivered at the site will be led by the University of Worcester and specialise in health.
A community group was previously given the keys to the Hippodrome, with volunteers devoting a huge amount of time to cleaning the site up, but they were taken back by Dudley Council when chiefs ruled they would not be able to come up with the necessary cash to bring the building back to life.
Plans to host a driverless car testing site at the hippodrome were also considered before the university park plans were chosen.
The new education facility is expected to be up and running by autumn of 2024 and will be around the corner from the Black Country and Marches Institute of Technology, which is due to start teaching higher education students science, technology, engineering and maths this year.
The schemes are both part of a wider regeneration project across the borough which also includes extending the West Midlands Metro from Wednesbury to Brierley Hill via Dudley and building the new Dudley Interchange which will link the bus and tram network.
Dudley Council leader, Councillor Patrick Harley, said: "This is a significant phase of our £1bn regeneration plans and builds on the massive strides we have been able to make with Metro, Very Light Rail and the demolition of Cavendish House in the last couple of years.
"I can completely understand local campaigners wanting to save the former Hippodrome building, and I am encouraged to see community groups working so passionately to improve the town.
"But we simply cannot allow this discussion to continue for another decade after exhausting every opportunity to find an enormous amount of funding.
"We have received several business cases over the years from successive campaign groups, and have handed over the keys to the building.
"But no one has been able make any significant headway in reviving a theatre which has not put on a show in more than 60 years.
"I have met with the campaigners and agreed to work with them on the ongoing regeneration proposals and look for ways to improve the cultural offer and night-time economy of Dudley."
The higher education bid has been drawn up by the Towns Fund board – a partnership between Dudley Council, Dudley College of Technology, University of Worcester, tourist attractions and other key organisations in Dudley.
Dudley was one of 100 areas across the country invited to bid for a slice of the £178.7 million Towns Fund.