The former JCB Heavy Products site off Pinfold Street.
The old JCB Heavy Products site in Pinfold Street, Uttoxeter, has been derelict since the 21-acre plant was demolished in June 2009.
Last month, the Post & Times reported how residents had become frustrated by the lack of action.
But East Staffordshire Borough Council revealed at a cabinet meeting that new plans will go before its committee in September and out to a full public consultation.
The scheme will include more than 250 houses built alongside retail space and a public park. It had been due to be discussed at a planning meeting at Uttoxeter Town Hall in February 2009 but was withdrawn at the last minute.
Councillor Geoff Morrison admitted he was "over the moon" with the news and he hopes the new proposals will kick-start a new era for Uttoxeter.
Mr Morrison, who lives opposite the site in Bridge Street, said: "It has been a bit delayed, but given JCB's professional and dedicated approach to everything they do, it must have been for a good reason and we will have a better scheme at the end of it.
"I am ecstatic that the development is getting under way because this is a very important gateway into the town."
The plans have been split into four different zones.
Zone one will consist of 257 new houses, while the second zone will see 4,200 square metres of retail space, alongside offices and a potential health centre.
Zone three of the scheme will see a central landscape area which will be developed to create a park. Picknall Brook will also be realigned.
Zone four will consist of a commercial area providing office space.
Hockley Road resident Julie Bateman welcomed the news but admitted she harboured concerns over access routes.
The 40-year-old said: "It is good to hear the plans are in place to improve the area – they have been a long time in coming.
"The derelict land looks almost as bad as the old factory did and it doesn't offer the best impression to people coming into the town.
"I wouldn't want to see a new health centre built because I think there is absolutely nothing wrong with the one we have already got.
"I am also a bit concerned about access to the new estate."
Maxine Walker, also of Hockley Road, said: "The area is desperate for something, although I was actually expecting it to be derelict for a while anyway. It will be nice to have new houses and more shopping facilities."
A JCB spokesman said: "We have submitted a revised outline planning application to East Staffordshire Borough Council and the plans will go to public consultation in a few months time."