It is hoped the overhaul of the area surrounding the ferry terminal will start within the next 18 months and is due to feature cafes, bars, conferencing facilities and luxury flats.
The bus station will be bulldozed and relocated in the town centr
e to make way for the project, which is set to have an iconic visual centrepiece.
The council has now begun talks with Sellar Property Group, which is behind the stunning plans for the Pompey's new stadium, about how to regenerate the area.
Because plans are in the early stages, there is no figure for how much the project will cost, but early estimations are in the region of £50m.
Leader of the council Cllr Dave Smith said: 'The sky is the limit really, it could cost about £50m, but it's just too early to say.
'It will be great news for Gosport especially on the back of the Pompey training ground and hopefully we can turn this town around and bring it out of the doldrums.
'We just need to get people around the table now and I'd like to see work starting within 18 months.'
Council officers are tracking down all landowners in the area to go into talks about the proposals.
Contracts are set to be drawn up with the next 12 months and construction work is hoped to start by March 2010.
The project is expected to be funded by money developers will contribute to build hi-spec accommodation in the area.
With new state-of-the-art facilities due to replace the crumbling Holbrook Leisure Centre and Pompey's training ground being given the go-ahead in Gosport, it's hoped the new development could mark a turning point for the town.
Shaun Farrell, business expert from the Impact scheme, which promotes financial growth in the borough, said: 'I think it would be fantastic news.
'Everyone realises that the gateway to Gosport isn't the most appealing at present and it would create more jobs too.'
Baron Phillips, spokesman for Sellar, confirmed there had been talks with the council and added the group is 'very committed to the area'.
However, in Portsmouth plans to develop the Northern Quarter are having to be rethought because of fears over the credit crunch.
However, Cllr Smith said: 'The credit crunch hasn't been brought up so I'm not even going to speak about it.'
The full article contains 427 words and appears in The News newspaper.
