The University of Northampton will build an International Leather Centre, including laboratories and teaching rooms, at the new Waterside Campus after it pulled out of the borough council deal.
A creative leather technology and leather conservation centre had been planned at the borough council's proposed £13 million Vulcan Works development in Angel Street, but issues surrounding the project's "financial risk and with phasing" has meant the university has had to look elsewhere.
Plans for the new centre will aim to deliver "technical expertise in education, training, research, conservation, and consultancy to support the worldwide leather industry."
A spokesman for the University of Northampton said: "The University’s Institute of Creative Leather Technologies (ICLT) is currently based at Park Campus, but as part of our relocation the ICLT will need to be relocated.
"A number of proposals have been explored, which included a town centre conversion option, but this project was not deemed value for money and could not be delivered within the University’s required timescales.
"We are now exploring provision of a new build International Leather Centre as part of the University’s new Waterside Campus, which will accommodate the ICLT and its partners and enable ongoing integration with other University faculties."
As a result of the failed deal back in November, Northampton Borough Council is now seeking further European funding to provide more managed workspace than initially envisaged.
The council hopes to provide a work space for creative businesses to start up and grow, which it hopes might interest university graduates.