The council is advertising for a development partner to build a mixed-use development of the Chapel Riverside site. It envisages apartment blocks and marine-related employment uses.
Bids in the range of £30m to £50m are expected.
The site has 500m of water frontage on the River Itchen close to the city centre. There has already been development nearby at Admirals Quay, Ocean Village and Centenary Quay, Woolston.
The council said that the Chapel Riverside development would “kick-start wider development of an entirely new, vibrant and exciting city neighbourhood, and provide a welcoming gateway to the city”.
Council leader Simon Letts said: ““I am delighted that we are now starting the process to develop the Itchen Riverside. Although the project is in its infancy, I am sure we will attract a lot of positive interest and secure a developer committed, like me, to bringing jobs and homes to the city. We will ensure that whatever is proposed will include full public access to the waterfront.
“We are seeking to attract a range of high-tech marine activities that compliment and support existing businesses and make best use of the riverside setting. These will sit alongside well designed high quality homes that have good links to the city centre and south towards the watersports clubs and Ocean Village.”