The crumbling Gordon Wilson flats in central Wellington have been sold to Victoria University.
The Housing New Zealand building has towered over The Terrace since 1959 but could now be demolished.
Housing New Zealand chief executive Glen Sowry and the university's vice-chancellor, Professor Grant Guilford, announced the sale yesterday.
The flats, at 314 The Terrace, once housed 131 people. They were evacuated in May 2012 after engineers found the building's concrete facade could collapse in an earthquake or strong wind.
Since then the flats have lain empty as Housing NZ worked out what to do with them.
The university has been attracted by the location of the site - directly below its Kelburn campus buildings - and negotiations have been under way for some time.
Guilford said a development of the site would link Kelburn with The Terrace and the central city, but there were no firm plans on what would eventually be built.
"We've got a lot of work to go through, but you can imagine some of the possibilities and we've got a number of things in mind," he said.
"You could possibly have a series of buildings stepping up to the Kelburn campus, bringing students safely through from The Terrace."
Whether the Gordon Wilson building would be demolished was a decision to make after consultation, he said. "If the consensus of the community was that the building shouldn't be there, it would certainly suit our views."
That decision would be taken first, during the next few months, before any new plans were drawn up.
The university has other development projects at both its Kelburn and Pipitea campuses, which would take priority over the newly bought site, he said.
Housing NZ retains ownership of the smaller McLean complex, also quake-prone and evacuated in 2011.
Sowry said McLean's 18 flats would be demolished and replaced by a new complex, potentially with 34 flats focused on one-bedroom apartments.
The McLean building was assessed by engineers at only 3 per cent of new building standard, making it red-stickered. "It has a very, very low earthquake rating and it's not going to be economic to repair it."
- The Dominion Post
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