Winchester City Council has amended its Local Plan to accommodate the £90m redevelopment scheme for Friarsgate.
The previous blueprint carried no mention of a large-scale redevelopment for the city centre site and so the council needed to amend the plan to comply with regulations.
The project is going through a six-month programme of council scrutiny and public consultation scheduled to end in June.
One company, London-based Thornfield Properties, is already in talks with the council on the scheme and cabinet members met in closed session on Wednesday to make a decision on whether to involve any other developer.
The council wants the scheme to include shops, up to 100 flats, a new bus station and leisure facilities.
Council reports said there was scope for a 150-bedroom hotel and a nightclub as well as the refurbishment or replacement of the existing multi-storey car park.
At a meeting of the local plan committee on Friday in last week, Labour member, Patrick Davies, spoke against the proposal for a hotel.
"If it meant losing some housing, I would scrub out the hotel straight away."
County council member, Pamela Peskett, raised concerns over the inclusion of a nightclub: "Young people need leisure provision, but we need to cater for children as young as 10 - and they're certainly not old enough for a nightclub," she said.
David Atwell, who chairs the city council planning committee, said he was concerned about the possible demolition of the Kings Walk antiques market.
"I think a challenge to any developer will be to find a way of incorporating this historical building into the scheme," he said.
The Friarsgate scheme is supported by the Chamber of Commerce, but spokesman, Jim Sawyer, gave a warning to the council: "I hope this development won't cause so much disruption that it drives people away from Winchester because it will be hard to get them back again," he said.
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