Council chiefs will ask for millions of pounds from the Scottish Government to pay for the relocation of tenants from Aberdeen’s Middlefield triangle area.
The site will soon be surrounded by roads as part of the Haudagain bypass – a £30million Scottish Government funded link road that will aims to take pressure off the roundabout.
Infrastructure committee members were asked to move onto full market testing on whether the remaining land should be used for housing or retail.
Soft testing had already shown that there was little interest in building flats on the site.
Members of the ruling alliance argued that a letter should be sent to local government minister Kevin Stewart asking the Scottish Government to pay compensation for relocating remaining residents and demolishing the buildings.
Figures provided to the P&J show that the predicted cost of relocation and demolition of the properties tops £2million, while the committee heard that Holyrood has already paid around £9million.
But the opposition SNP group argued that there shouldn’t be further market testing and that it should be openly marketed for shops.
SNP Northfield and Mastrick North councillor Jackie Dunbar said the Scottish Government had already made their position clear that further discussions would be held once there was a firm plan for the site.
She added: “We need to move forward with this , the community need to know what will happen to this land.”
Aberdeen Labour councillor Gordon Graham, of the same ward, said: “We have a plan and we are seeing it through.”
The administration motion was passed by nine votes to eight.