An appeal is due against a decision to block plans for a replacement building in which to site a run-down school.
Derbyshire County Council had applied to re-site Herbert Strutt Primary School, Belper, on part of the site of a former secondary school.
It would have seen the remainder of the land sold to Haslam Homes to build housing, but Amber Valley Borough Council turned down the proposals.
The county council and Haslam Homes are taking it an appeal inquiry.
New developments
Derbyshire council chiefs said the Hebert Strutt school needed about £1.5m of work to bring it up to modern standards for the 208 pupils.
They put in a joint planning application in 2003 with Haslam to build on a site off Bargate Road.
An appeal was submitted but put on hold while a public inquiry was held into the borough council's local plan, which decides what type of development is suitable across the borough.
The county council has now agreed to back the developers' application for an appeal inquiry, to be heard by a government inspector.
County councillor Alan Charles, cabinet member for school planning and support, said: "When the application first went to Amber Valley Borough Council they were supportive of building a new school, but opposed the new housing part of the application.
"However, the only way we can currently afford to replace Herbert Strutt Primary School as urgently as it needs doing is if we receive the proceeds of selling off the remainder of the site to a housing developer."