Sandown Civic Centre could become a new community mental health facility if the Isle of Wight NHS Trust gets the go ahead to buy the site.
The Isle of Wight Council, which owns the building, recommends approving the sale.
The local authority says it is need of major maintenance and refurbishment, which could cost in the region of £800,000.
Funds have been given to the Island's NHS, by NHS England and Improvement, to acquire the site.
A report to the council's cabinet says it means the building will be able to be fully utilised as a community hub for the Bay area.
The connected civic centre and barracks building is part of a larger council site in Sandown, which includes the Heights leisure centre and car parking.
The wider site includes Sandown Medical Centre, which contains two GP practices.
It was formerly the main offices for the old South Wight Borough Council and more recently has provided accommodation for various Isle of Wight Council services, including revenues and benefits, housing, and parking services. These services have been relocated in recent years as part of the council’s property rationalisation programme.
The report is due before Isle of Wight councillors next Thursday (11).