The Fox Hill site was previously leased to Artisan H Ltd but the developer went into administration in 2011. KPMG was appointed as administrator by the Bank of Ireland.
There were plans for 179 homes on the site, designed by Dutch architect Meccanoo, but just six had been completed and sold when Artisan H went under and 23 were under construction.
The Bank of Ireland now has a developer lined up to take over the development but any new lease needs to be agreed with the city council.
The council’s cabinet will hear a report on the site at a meeting on Wednesday 18 September. It is expected to give authority for the council as a freeholder to negotiate a new lease and allow construction to resume.
Councillor Harry Harpham, cabinet member for homes and neighbourhoods, said: “It is great news to see that a private developer has been found for this site which I am sure residents in the area will very much welcome.
“It is vital to ensure that a new developer is secured who can deliver high quality housing for Fox Hill. This is a private development and one which a private developer will be taking over. This will give our local construction industry a boost, and help meet the housing needs of people in Sheffield and develop high quality properties in this area.”