The building on Abington Street will be used as part of Northampton Forward's ongoing Town Centre Masterplan.
Cllr Tim Hadland, Cabinet member for regeneration and enterprise and Northampton Forward board member, said: "We published our masterplan last year outlining steps we will take to transform our town centre into the thriving hub our residents deserve.
"As part of that, we identified the need for increased town centre living which will support the many businesses that exist and help them to adapt to dramatic changes in the way people shop.
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"Coronavirus has accelerated this change and made it even more important that we take action, and the former Marks and Spencer site is a crucial one for us.
"It represents an opportunity to make further headway on our plans for the town centre, which started with the proposal to revamp Market Square, and include a variety of other key sites.
"We've already submitted a bid for funding to support the Market Square project and we are currently consulting with the public on which potential developments to include in our bid for support from the Government’s Towns Fund."
The Council, on behalf of Northampton Forward, was invited to make an initial application to the Government's Towns Fund element to create shovel-ready sites.
The money will be used to remediate the site, including removal of large amounts of asbestos as part of work to get it ready for development.
