Torfaen council has agreed to buy the The British in Abersychan from owners HSBC for £300,000.
Councillors will be asked in a meeting on 18 October to approve a package which includes £1.7m from the Welsh Government and £2m from the authority.
Long-term plans for the 1,300-acre site have not been finalised.
Council leader Bob Wellington said: "The British has been a millstone around the neck of this community for generations.
"Finally, this proposal could put an end to the cycle of despair and lift the threat that has hung over the community following numerous speculative land banking or coal extraction schemes that have failed to come to fruition."
If approved, The British would come back into public ownership by the end of 2016 and money would be spent on restoring the site and examining any health and safety risks.
Since 2004, the site has been acquired by four different owners before being handed back to creditors HSBC in 2009 after the company which bought it, the Castlemore Group, went into administration
Torfaen AM Lynne Neagle AM said: "For too long the site has been passed from one private owner to the next. The community has waited a long time for this proposal and if it is approved I will continue to work with all those involved to ensure that the land is regenerated to its full potential."
The British, named after the ironworks founded there in the 1800s, has been derelict for 40 years.
The office building and Quadrangle were designed by Hyde Park and London Zoo architect Decimus Burton.
Mr Wellington added: "This could be a catalyst for investment in the north of the borough and, if approved, the council can explore the longer-term opportunities on the site, including restoring the historic buildings, affordable housing, commercial and green energy opportunities."
A derelict iron works site in Torfaen could be bought by the council in a £3.7m plan after decades of fruitless schemes for the area.