Portsmouth Water is eyeing up a move from West Street, in Havant, to green land it owns next to Bosmere Medical Centre in Solent Road.
Havant Borough Council bosses say the proposal could pave the way for 135 of the ‘most sustainable’ homes to be built at the firm’s old HQ.
It is hoped they could attract residents with low carbon footprints, who would walk or cycle to the town centre or travel elsewhere on the train.
‘It’s a good site to live in for people who are retiring or want to commute,' said councillor Tim Pike, the council’s deputy leader and planning boss.
‘Being close to the town centre, it’s good perhaps for people not having to use a car every day.’
He added: ‘It’s also very much welcome that Portsmouth Water is committing its long-term future to the borough.’
About 100 staff work at Portsmouth Water’s current site and its new HQ would be two storeys high with ‘extensive glazing'. It will be built alongside an extra 2,000sqm of office space for start-up businesses.
The move would be a downsize, the firm says, as its office now is ‘a lot larger' than required, with departments based across multiple buildings.
A grass buffer would separate the entire build and Solent Road, with units angled to respect the Grade II-listed Old Manor House in Brockhampton Road and the Brockhampton Conservation Area.
Ray Cobbett, chairman of Havant Friends of the Earth, said the ecology of the old and new sites ‘must be added to' if a move takes place.
It comes after the West Street site was identified to have protected trees and is sometimes used by Brent Geese and Solent Waders.
‘Portsmouth Water are quite an environmentally reasonable organisation and I would expect them to go to the highest possible standards if that's what they wanted to do,' said Mr Cobbett.
A spokesman for Portsmouth Water said the ‘exciting' move is necessary as its current, 1960s-built HQ needs ‘urgent repair and refurbishment’.
He added: ‘We do not anticipate our 730,000 customers will be impacted by this move at all.
‘We will continue to have the same area of supply running from the west of Fareham to Arundel, taking in the key conurbations of Portsmouth, Gosport, Havant and Chichester.’
Developer Chancerygate, which is behind the new build, said access to the Solent Road site will come from widening the medical centre turn-off.
No planning application has officially been submitted for the proposals.
They will go on public display at a development consultation forum at Havant's Public Service Plaza at 5.30pm on October 22.