The cash-strapped Ratho Adventure Centre is set to be bought by Edinburgh City Council for £3.5m.
The centre features a stretch fabric roof and 100ft climbing wall
The £26m centre, which includes the world's largest indoor climbing wall, went into receivership months after its official opening in December 2003.
It has been operating limited hours under receivers since March 2004.
The world climbing federation, UIAA, has already started discussions to bring future international climbing events back to Edinburgh.
It is also looking into the possibility of holding a special climbing event at the venue to coincide with the 2012 London Olympics.
It is likely that the centre will be managed by Edinburgh Leisure or a new council-owned company. A number of improvements are being planned.
Built in a quarry, the centre houses a state of the art climbing and recreational facility.
With over 110,000 sq ft of floor space, it has been hailed as the largest indoor facility of its kind in Europe.
Since opening, it has hosted four world championship climbing competitions and also offers conference and event space, retail and office accommodation, leisure club facilities and accommodation for 90 people.
If the sale goes ahead, the council hopes to create a bouldering hall - low level climbing without ropes - and introduce a children's play barn area and two extra function rooms.
Council leader Donald Anderson told BBC Radio's Good Morning Scotland programme: "This is an exciting opportunity.
"To have such a world-class tourism facility here in Edinburgh is something we are passionately committed to so we were determined to try to do what do could to save it.
"It would have been a tragedy if this facility had been allowed to close. Thankfully we have been able to step in and save it.
"We think this is a sound investment for us as a city and something that is a real asset for Edinburgh and the whole of Scotland."
The council is working with British Waterways to provide tourism and leisure facilities for about 60 possible berths along the Union Canal outside the centre.
The council, which has been in discussions about the possibility of a joint venture with a private sector partner, has approached the Scottish Executive and Scottish Enterprise Edinburgh and Lothian for funding.
It will decide whether to proceed with the purchase at its full meeting on 15 September.