A masterplan will be drawn up to look at the future of the Storey Centre’s public garden.
The Tasting Garden could be used to promote arts and culture in the city.
But councillors have decided not to restore a popular piece of vandalised garden artwork due to the cost.
The Tasting Garden, inside the Storey Gardens, was created by artist Mark Dion in 1998. It was originally four paths forming branches of a tree, each leading to a bronze sculpture of a fruit on a plinth.
But the metal fruits – an apple, cherry, plum and a pear – were stolen several years ago. About 90% of the artwork, including trees, most of the plinths and memorial stones, remains in place.
Coun Eileen Blamire, council leader, said: “In an ideal world we would be able to restore the artwork but the reality is that in the current financial climate this is unrealistic.
“Although we have taken the decision not to restore the artwork, I very much hope that the gardens will be brought back into use and can be used to promote arts and culture.
“They really should be a jewel in our crown.”
In 2014, Sir Nicholas Serota, director of Tate, pledged his support for the restoration of the artwork. At the time John Angus, formerly of the Storey Gallery, said: “The council has a simple choice. If it really wants Lancaster to be an arts city it will restore the Tasting Gardens.”
“If it decides to remove the Tasting Gardens Lancaster City Council will have an international reputation as a destroyer of art.”