DURHAM University says it wants to work with residents opposing the loss of green space as part of a multi-million pound riverside redevelopment.
The university and city council are behind plans to build 90 apartments and 25 houses at Elvet Waterside, including the city's baths, which are to be replaced with a pool being built near Durham Sixth Form Centre.
But residents are worried that a former bowling green could be built on and are fighting to keep the land for recreation.
The green belongs to the council, which bought the land from the university in 1944. A covenant on use of the land would have to be lifted if it was to be developed.
Durham University Council agreed yesterday that it would work with residents to try to find an acceptable use for the land.
A spokesman for the university said: "We haven't closed our minds to anything. We are in the public consultation period and we remain open to looking at proposals for the land.''
Elvet ward councillor Nigel Van Zwanenberg, speaking for himself and colleagues Sue Pitts and Meg Norman, said: "We are delighted that the Durham University Council has agreed in principle to work with residents to explore possibilities of creating new and better public facilities on the racecourse area.
"So without raising expectations too much, I am confident that we can look forward now to a highly positive outcome for public consultation.
"We have noted the strength of feeling of local residents and their wish that green space continues to be provided in the ward for its residents and visitors. We as local ward councillors have a responsibility to listen carefully to our constituents - and we have.
"We have had numerous meetings with the University and the City of Durham Council to find a compromise proposal that meets the aspirations of local people and brings benefits to both the city and the university.''
Pippa Bell, of the Elvet Residents' Association, said: "We would welcome it if they are going to talk. The strength of feeling among residents, students and visitors is very high that this land should not be built on.''
She added that the association was not opposed to the entire development, just the loss of the bowling green, which she said would be "madness'' when plans for a "necklace park'' along the River Wear were being prepared
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