Saga at an end as Wolverhampton's former Royal Hospital to become homes

Tesco has sold the landmark Wolverhampton site to the Homes and Communities Agency for an undisclosed sum.

A new campus for the City of Wolverhampton College is also being considered as part of the long-awaited restoration of the listed hospital buildings.

The news ends years of uncertainty over the future of the All Saints site, which closed in 1997.

The Royal site had been lined up for a £65 million superstore redevelopment until Tesco pulled the plug on a string of future developments last year.

But now the government's HCA has revealed that the 12.5 acres of land, which also includes the former bus depot and further development land, has been sold by Tesco to the HCA.

The site will be predominately used for residential development – including starter homes – alongside a potential new college campus.

The city's deputy council leader, Councillor Peter Bilson, today hailed the announcement as 'great news' for the city.

He said: "Over £868m of investment in city centre projects is either on site or in the pipeline as the regeneration of Wolverhampton continues.

"We are delighted the HCA has taken on board the opportunity to transform this site.

"It will not only bring new jobs, business and housing but will make it a key gateway to the city centre. This is great news for the city."

College bosses today confirmed that a feasibility study of the hospital site is taking place and is due to be completed by the end of the month.

Claire Boliver, principal at City of Wolverhampton College, said: "Thanks to a grant from the Black Country Local Enterprise Partnership, the college is currently carrying out a feasibility study of the site of the former Royal Hospital.

"The study is considering the viability of the site, as well as other sites in the city, for a new state-of-the-art campus that will help to reinforce the value of education to the city and equip students with the skills that employers in their chosen industry require."

The HCA worked with the Birmingham office of property agents, JLL, on the acquisition of the site. Karl Tupling, the HCA's executive director for the Midlands, said: "We look forward to working in partnership with the City of Wolverhampton Council to secure a planning consent on the site which will deliver much needed housing, including starter homes, and potentially a new campus for the college.

"We believe the Royal Hospital site will transform this gateway into an inviting new approach into the city centre."

Philip Farrell director of Development at JLL added: "The HCA have been very forward thinking in acquiring the former Royal Hospital.

"It is an excellent site in an important location for the city.

"We firmly believe that this is a wise use of public money to stimulate the development of this significant scheme." The news that Tesco was to pull the plug on its planned redevelopment came as a huge blow to the city.

Wolverhampton South East MP Pat McFadden described the news as 'a betrayal of the people of Wolverhampton'.

He said today: "This sale means we can now turn the page on the whole sorry saga of Tesco's involvement with this site.

"The company broke it's word to the people of Wolverhampton when they broke their promise to build on the site and it needs a new owner to take it forward.

"The community in the All Saints area want to see the site redeveloped. I hope that we see new housing on the site as soon as possible and hope that the possibility of Wolverhampton College moving on to the former hospital site now comes to fruition."

The site had become a focus of frustration for the city, having been the subject of numerous delays since Tesco first unveiled plans for a new Wolverhampton store more than a decade ago and it had been hoped the superstore would help regenerate one of the most deprived parts of the city.

A Tesco spokesperson added: "We're pleased to announce the sale of the former Royal Hospital site to the HCA, which will bring forward investment for both the local community and the City of Wolverhampton."