Talks are well under way to bring a Marks & Spencer Foodhall to the new Bay Shopping Park at the former Frontierland fairground site.
Developers Opus North said they are weeks away from concluding the deal.
Many Morecambe residents have longed for years for the return of a Marks & Spencer shop to the town.
M&S had a town centre outlet on the corner of Euston Road and Victoria Street until the chain pulled out of the resort in the 1980s – which many saw as symbolic of the decline of the town as a shopping destination.
A spokesman for Opus North said: “The Marks & Spencer Board has approved opening a new Marks & Spencer Foodhall at the Bay Shopping Park development in Morecambe.
“Negotiations are currently underway with the intention of concluding a deal in the coming weeks to bring M&S to Morecambe.
“Related to this, a planning application is shortly to be submitted to Lancaster City Council, which will amend the existing planning permission to accommodate a Marks & Spencer Foodhall at the development.”
An M&S spokesman said: “We are always looking at new sites for stores to ensure we have a relevant local offer, and Morecambe is a town we are currently interested in.”
The news comes after weeks of speculation and scepticism among residents about the lack of movement at the seafront site.
Opus North and site owners Morrisons were granted planning permission in November 2014 and work was originally due to start in autumn 2015.
But the planned £17m development was hit with a series of snags as the developers said “practical hurdles” had slowed down talks with retailers hoping to occupy spots on the shopping park.
The fire at the former Ranch House pub in July was the latest setback for the development.
“As one would expect, the recent fire at the Ranch House has complicated progress on site, but arrangements for demolition are now well in hand,” said the spokesman.
“Provided deals are concluded with potential occupiers, we anticipate starting work on site before the end of the year.
“Clearly, regeneration of the site is taking longer than either we or local people had hoped. We are very grateful to the community for the patience it has shown and hope that the progress being made provides reassurance that Opus remains committed to delivering a quality retail development in Morecambe.”
Other plans for the Bay Shopping Park include a Brewers Fayre restaurant and 60-bedroom Premier Inn hotel to replace the Ranch House.