The council paved the way for the West Hull project after approving the transfer of the site’s lease over to the new school for a peppercorn rent.
Subject to detailed planning permission for the Boulevard site, it is hoped the 600-pupil secondary school will open it doors for the 2014 academic year.
The Hull Free School has been approved by the government and will receive a £9.2m grant from the Department for Education to build and equip it.
Council leader Steve Brady said: “We know many people oppose the principal of free schools but the Government would find it pretty unusual for a city to be turning this down in an area where we are fighting tooth and nail to get regeneration funding put back in.”