Clayton Hospital could be transformed into a £15m centre for sports and performing arts.
Wakefield Grammar School Foundation, which last year agreed a deal to buy the derelict site from Mid Yorkshire Hospitals NHS Trust, hopes to turn it into a leisure space for both its pupils and the community.
It plans to demolish the run-down hospital buildings and replace them with sports facilities and pitches, a swimming pool and a performing arts centre with a theatre.
Laurence Perry, bursar and clerk to the governors at WGSF, said: “This is a one off opportunity to acquire land between our two senior schools to enable us to provide exciting new facilities.
“The development will create attractive, state of the art facilities, that both our pupils and the community can take advantage of and enjoy.”
The new buildings would be used by students from WGSF’s junior and senior boys and girls schools throughout their education.
But Mr Perry said he also hoped sports teams, community groups and theatre organisations would use the facilities during evenings, weekends and school holidays.
Mr Perry said: “We have very much been part of Wakefield since 1591 and we are very much committed to the community of Wakefield.
“We want something that the whole city can be proud of not something that is wholly for us.”
The Foundation has launched a public consultation about plans for the abandoned site, which has been a target for vandals since the hospital closed in 2012.