Bristol City Council hopes the new 'urban quarter' will create new jobs and regenerate the area around Bristol Temple Meads station - one of the last remaining unimproved mainline stations in the UK.
Cabinet approved a proposal to enter into an agreement with Skanska that could see the derelict George and Railway site close to the station redeveloped into a home for the expansion of the successful Engine Shed enterprise hub.
Engine Shed, a collaborative project between Bristol City Council and the University of Bristol which opened in 2013, contributed £7 million to the economy and reached full occupancy within 12 months of opening.
It houses the University's Bristol SETsquared Centre, which was named as the best university business incubator in the world last year and is also supporting a record number of businesses.
The potential development offers an opportunity to create more space to inspire young people to be the entrepreneurs of the future while transforming a gateway site close to the station site that has been an eyesore for years.
Nick Sturge, Director of Engine Shed, said: "Engine Shed has been an exciting journey for us, exploring the strengths of collaboration not only between Bristol City Council and the University of Bristol but also the other local universities and local authorities as well as the many partners we have collaborated with.
"Engine Shed 2 will give us significantly more scale to deliver more economic activity in the city-region – that is more inclusive of the local, especially under-represented, communities. We want to create an environment that is iconic and representative of the ambition for the city.
"The cross-party support from Cabinet members was a fabulous sign of the very Bristolian collaborative approach to long-term, sustainable and inclusive economic growth that exists in the West of England and we are proud to be a part of that."
The extension of the Enterprise Zone, to include parts of Redcliffe and other sites close to the existing boundary, would allow future retained business rates to be used to further develop the zone. Redevelopment of the station would open up the Temple Meads East area, allowing the Enterprise Zone to be developed to its full potential.
Following further work to determine exact boundaries, proposals will be submitted by the West of England Local Enterprise Partnership for consideration by government. Subject to approval, the extension would come into effect in April 2017.
Mayor of Bristol, Marvin Rees added: "It is really important that in these challenging financial times we continue to plan for the future and invest in projects that will bring forward inward investment, jobs and much needed homes for our citizens. The Temple Quarter Enterprise Zone will deliver a new urban quarter for the city, turning sites that have been derelict for years into places that create employment opportunities and are open to all.
"I particularly welcome the proposal to expand the zone that could help to fund the redevelopment of Temple Meads station to create an improved transport hub, ensuring that the full potential of the Enterprise Zone is realised. We will continue to work together with our partners Network Rail, the Homes and Communities Agency and the West of England Local Enterprise Partnership to make this long term aspiration a reality."
A timeline shows the progress of the zone since opening in 2012.