The conservation charity is appealing for public help to raise the funds to buy Snaizeholme, near Hawes, where, if it is successful, it aims to plant trees and help woods naturally regenerate.
This will create new native woodland within different habitats that will also include meadows, grassland and peatland.
The project will protect and expand a nature reserve for rare red squirrels which live in pockets of plantation woodland with new native trees, and improve the habitat for otters which also make their home there.
The farmland site, which is near to the Ribblehead Viaduct and the long-distance Pennine Way walking trail, is on the open market so the Woodland Trust needs to complete the sale by the end of June.
Al Crosby, the Woodland Trust’s regional director in the north, said: “We are incredibly lucky to be given this unique opportunity to buy the site and create vibrant new native woodland for wildlife and people.
“It is a great chance to boost biodiversity at a time when the natural world is in crisis.
“Woodland birds will have a home there for the first time, and open scrub woodland should attract species like the black grouse.
“Trees will boost the water quality of the river and beck, safeguarding the resident otters, plus birds such as herons, grey wagtails, kingfishers and dippers.”
The £3.5 million the Woodland Trust hopes to raise would cover the cost not only of the land but also of the tree planting and woodland regeneration work, which it said is sorely needed in a wider landscape that has less than 5 per cent tree cover.
The trust said Snaizeholme would become a flagship woodland regeneration scheme for the wider Northern Forest project, and links in with the woodland strategy of the Yorkshire Dales National Park, in which it sits.
“The Yorkshire Dales are of course well known for its wonderful culture, rolling landscape and villages and of course its Wensleydale cheese – the creamery is just four miles away from the site,” Mr Crosby said.
“If we’re successful we can enhance the area further by creating a unique and diverse woodland habitat.”
If it goes ahead, the scheme would look to link and buffer existing neighbouring woods, small patches of which are ancient woodland, with new woodland of native trees such as birch, oak, rowan, willow and Scots pine.
The trust hopes the existing wooded gullies would naturally regenerate, and it would also be restoring and caring for 167 acres of meadow and peatland as it seeks to create a mosaic of habitats which will include open valley bottom river meadows, upland grassland and montane scrub.
Snaizeholme is a managed ‘refuge’ area for our native red squirrels, whose numbers have been decimated by the invasive grey squirrel, brought into the UK from America by the Victorians.
Managing invasive species which include plants as well as animals and cost the British economy over £1.7 billion a year, is being highlighted this week as part of the sixth annual Invasive Species Awareness Week.