Land next to the Leeds and Liverpool Canal in Barnoldswick could be turned into houses, allotments and a woodland school.
Development of the former Bank House site, in Applegarth, would also see four canal moorings and a new footpath created.
Plans for the work, which include eight houses, have been submitted to Pendle Council.
A spokesman for planning agent, Alison Roland Town Planners, said: “The applicant has consulted Barnoldswick Town Council and it supports the scheme in principle.
“In addition, the residents of the houses in George Street have also been consulted and they are in support of the proposals.
“Pendle Nursery supports the proposal and the application is accompanied by a letter of support, as well as a 120-signature petition from local residents in favour of the Forest School.”
In the application, the site is described as “derelict land” and a “wasted resource”.
The nine allotments will be offered to Barnoldswick Town Council and the woodland school will be used by Pendle Nursery.
A 12-space car park could also be created on the site, for use by visitors to the allotments and canal users.