Two hundred new homes could be built on the site of a derelict former Victorian workhouse.
The development next to Southlands Hospital, Shoreham, would include 57 affordable homes for key workers and those on low incomes.
These would be divided between social rented accommodation and shared ownership.
There will be a village green and children's play area and a new access road will be built from Upper Shoreham Road.
The site was sold in 2005 as part of a £320million deal forged by the NHS Hospital Sites Programme and the Homes and Communities Agency (HCA).
It became derelict and vandalised after it shut in the 1990s and local residents feared the landmark workhouse building would be demolished and lost forever.
Crest Nicholson have now submitted a planning application for 197 homes on the site which will be known as St Giles Place.
The application follows public consultation organised by the developer and Adur District Council last year.
An council spokesman said: “The development will keep some of the original workhouse buildings, including the refectory and entrance block.
“They will be refurbished and renamed the Refectory Building and West Lodge.
“Some of the existing buildings will be demolished including Storrington House, the former engine house, the chimneys and staff accommodation block.”
A Crest Nicholson spokesman said: “We and the HCA have been keen to incorporate a variety of character areas.
“They create a sense of place for new residents while respecting and enhancing the Southlands Conservation Area.”
They will be a mixture of 72 one and two bedroom flats and 125 houses with up to four bedrooms.
The site will be landscaped and many of the existing mature trees will be kept.
The Steyning Union Workhouse was built in 1896 when parishes had to provide food and shelter for the poor.
Adur District Council's development control committee will decide if the scheme should go ahead in the autumn.
The plans can be seen at Adur District Council's offices in Ham Road, Shoreham, or viewed online at www.adur.gov.uk.
The project has a dedicated website at www.st-gilesplace.co.uk and a Freephone information line on 0800 169 8766.