A multi-million pound national opera house could be built on the site of the scrapped super-casino project.
Manchester City Council and the Royal Opera House, Covent Garden, are in talks about whether an opera centre could regenerate the east of the city.
Any project could include a performance space and training venue for opera and ballet, open to the public.
Councillors have been exploring other ways of regenerating the area after ministers scrapped the casino plan.
The discussions, which are at an early stage, emerged after the Royal Opera House decided to show Monkey: Journey To The West in July.
"Manchester has a strong track record of using culture to drive urban regeneration"
The circus opera, created by Gorillaz and Chen Shi Zheng, opened the 2007 Manchester International Festival.
Chief Executive Tony Hall said: "This has provided a great opportunity to explore possible innovative future projects.
"Manchester has a strong track record of using culture to drive urban regeneration."
A council spokeswoman said it was too early to speculate about costs or how many jobs would be created.
She said: "We can confirm we are holding talks with the Royal Opera House about economic and social regeneration through an innovative partnership.
"The ideas we are discussing are not just about performance but include skills and training covering many aspects of opera and ballet."
Manchester was the surprise choice for the super casino when it was awarded in 2007, beating Blackpool and the O2 in London.
The project was intended to drive urban regeneration close to Manchester City Football Club's Eastlands stadium.
But it was scrapped by the government in February - provoking anger and disappointment in the city.
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