Workington Transport Heritage Trust plan to have the tram removed and restored at an estimated cost of about £15,000.
After its removal from the building near Carlisle College and restoration, it will go on display in Workington.
The tram was built in the early 20th Century and its last journey took place in Carlisle in the 1930s.
Before being moved into the building, it was believed to have been stood for many years as a garden shed.
The remains of the tram is mostly the framework of the lower saloon.
Phil Tuer, from the Workington Transport Heritage Trust, said restoring the tram was not going to be easy.
He said: "It's in a very sorry state of repair and requires a large amount of work to be carried out."
Alistair Grey is the secretary of the trust and says that the door to the building is smaller than the door that was on it when the tram was originally moved there.
He said: "Dragging the tram out will be a tight squeeze.
"It's been in the building for many years and the pigeons have left layers of muck that needs cleaning up."
Mr Grey said it could cost up to £15,000 to restore the remains of the tram.
He said: "It was a double-decker tram in its heyday and all that's left now is the wooden framework of the lower saloon, all the metal work, the chassis, the wheels and the controls have all disappeared, so it's going to cost that money to restore it.
"We're trying to create a flavour of what the tram would have looked like, we can restore this wooden saloon into a presentable exhibit and we can use it as a centre piece in a future visitors' centre in Workington.
"It will be used to tell the story of the Carlisle tramway system."
It is hoped the work on the tram will begin in December.
Carlisle's last surviving tram will be moved before the derelict building where is stands is demolished.