The Grade II-listed former hospital lies on Scarborough’s main seafront, overlooking the South Bay Beach and the harbour.
St Thomas Hospital was originally known as the Royal Northern Sea Bathing Infirmary.
It was built between 1850 and 1860 and designed by William Baldwin Stewart. A classic example of Victorian architecture, the three storeys high with tall arched windows and two projecting front gables flanking long cast-iron balconies.
Miles Lawrence, director of leading Yorkshire property consultancy Lawrence Hannah, who is marketing the property jointly with the Leeds office of Sanderson Weatherall, said: “This is a tremendous development opportunity in a fabulous location.
“The front section of the property on Foreshore Road comprises six retail units at ground floor level, providing an income of more than £120,000 a year.
“The upper floors, which have planning permission to be converted to residential apartments, are currently vacant.”
There is a three-storey former staff accommodation to the rear, together with two cottages fronting Merchants Row. The whole site, which is in a conservation area, extends to 0.527 acres.
Mr Lawrence commented: “Yorkshire’s East Coast is booming - and Scarborough is the jewel in its crown. It was the county’s first seaside resort, stimulated by the growth of the railways in the 1840 and 1850s.
“It is now an established commercial, tourist and retail centre, approximately 40 miles east of York with a population in the region of 81,000 people. The town is situated adjacent to the North York Moors National Park and is one of the principle resorts on the north east coast attracting an estimated 7 million visitors per year.
“St Thomas Hospital occupies an incredible position at the centre of the town’s South Bay. It is very close to the former Futurist Theatre site which is currently planned to be developed as a leisure development by Flamingo Land.
“The site is in an area with substantial footfall and amongst tourist related units included gift shops, cafes, restaurants and amusement arcades. The property itself is situated between two of Scarborough leading amusement centres, Coney Island and Gilly’s Leisure Centre.”