Keepmoat has set out plans to deliver 343 new homes on the site, including 20% affordable housing on the main works site.
The developer’s construction arm will run the design process for the residential development alongside drawing up a remediation strategy in order that a planning application may be submitted towards the end of 2013.
To refurbish Osmaston school and the Marble Hall as well as other infrastructure improvements in the early stages of the regeneration programme the council will borrow £2m, which will be recouped as Keepmoat pays £7,000 for each home sold.
The initial phase forms part of a more ambitious £500m plan to regenerate the area.
The main Rolls Royce building is a Grade II listed building and plans have been put forward to convert it into a community facility.