The comic actor, one half of famed Anglo-American double act Laurel and Hardy, spent part of his childhood in Bishop Auckland, where he was a pupil at the former King James I Grammar School.
The listed building, in South Church Road, known as the Laurel Building, has been empty since 2000 and in 2007 was gutted by fire.
It could now be in for a new lease of life after county bosses agreed plans to renovate the site for housing.
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Bishop Auckland councillor Sam Zair said: “The Laurel building was a beautiful building in its day and it’s a shame what happened 10 or 12 years ago when it took fire and destroyed the ingredients within the building.
“On occasion there’s been applications to the heritage lottery to help bring it back into use, but those failed and I feel sorry for the residents living opposite, who have seen a lot of anti-social behaviour and it set on fire a few more times.
“But I was pleased to see someone come forward to bring this building back into use.”
Coun Zair was speaking at a meeting of Durham County Council’s Area Planning Committee for the south and west of the county.
The plans, submitted by the Darlington-based Railway Housing Association, included 16 two-bedroom bungalows and 12 apartments on the site for over 55s.
Part of the back of the building demolished, but the ‘historic frontage’ will be kept.
Bishop Auckland Cricket Club borders the development and Coun Fraser Tinsley requested provision of fencing be added to the plans to protect workmen and, later, residents from stray balls.
The panel voted unanimously to approve the application.
The original King James I Grammar School opened in 1604, but did not move to its eventual site in South Church Road until 1864.
Stan Laurel attended the sixth form for six months in 1902, before moving on to Gainford Academy, also in County Durham.
His family also lived for a time in North Shields, and he attended The King’s School in Tynemouth.