UP to 500 jobs could be created after plans to build a major supermarket were unveiled.
Housing provider Gentoo has drawn up early stage plans to breathe new life into the site in Pennywell, which includes the superstore and up to 400 homes.
If given the go-ahead, the plans could create up to 500 full-time and part-time jobs in the area.
Gentoo bosses said their original £50million masterplan, which aimed to rebuild about 600 homes on the run-down estate, was stalled when the economic meltdown struck.
Building work virtually ground to a halt on sites across the city as the funding Gentoo received from the Government was cut from £34million over 18 months to £5.8million over four years.
And with fewer people being able to secure mortgages, the housing group has taken a major financial hit.
But the offer to develop a major food retail unit on the site has thrown them a lifeline, potentially giving them the means to rebuild a mix of homes for sale and rent on the site.
The housing company has been in talks with the unnamed supermarket over the past 12 months in an attempt to secure a deal.
Gentoo hopes to lodge its grand plans with Sunderland City Council planners early next year.
A public consultation will follow before any decision is made on whether they can push forward.
If given the green light, the superstore would also be ordered to build access roads and a roundabout on the site at a cost of £2million as part of the deal.
John Craggs, deputy chief executive of Gentoo Group, said: “We are delighted to be looking at such a positive development opportunity for this area of Sunderland that may provide not only several hundred new homes but much-needed employment for local people.
“Gentoo Group, like many development organisations across the north, have stalled construction sites where, in an ideal world, house building would have continued some time ago.
“We have had to make a number of staff redundant as a consequence of this down-turn, most of whom were residents in the city.
“With Government grants reducing and a lack of mortgage availability affecting house sales, we are currently looking at other options to continue to provide top quality housing in the city and the region, and places where people aspire to live and work.
“We feel that this is one area with this potential.”
Councillor Bryan Charlton, the local authority’s portfolio holder for prosperous city, added: “The city council has not received a planning application.
“Any new application, once received, will be considered on its merits having regard to national and local planning policies and other material considerations.
“Neighbours will also be consulted and will have the opportunity to make representations through the planning process.”