West Sussex County Council is looking into the possibility of housing Woodlands Meed College on the existing school site.
Woodlands Meed was formed in 2012 when two special schools merged.
While the younger children have been educated in the new building in Chanctonbury Road, older children have been in a prefabricated building in Birchwood Grove Road - a situation the county council has now described as "not the best environment for the pupils or the most efficient way to run this school".
Parents have long been campaigning for a permanent college to be built but the money to do so has not been available.
In 2016, governors were left "shocked and dismayed" after land earmarked for its expansion was leased to the University of Brighton Academies Trust.
A meeting was held on Wednesday March 14 between Richard Burrett, cabinet member for education and skills, Deborah Myers, director of education and skills, school governors and headteacher Adam Rowland.
In a letter to parents, posted online by the Complete Woodlands Meed School campaign, Marion Wilcock, chairman of governors, said: "They have proposed that a feasibility study be carried out to see if it is possible to provide the necessary accommodation on the school site, rather than replacing the buildings at the college site.
"A previous scheme presented at the time of the grant of the academy lease was rejected on the grounds that there was insufficient space, but it is possible that with some creative design that this might be achieved."
The county council will now carry out the feasibility study, with the outcome expected in the early summer.
Mr Burrett said: “We are absolutely committed to working in partnership with Woodlands Meed governors, families and staff to get the right solution for the children who depend on this school and those who will join the school in the future.
"This has always been about doing the right thing for those children to give them the standard of education they need and deserve. I look forward to developing our partnership and working closely with the school to move us forward on this issue.”
Mrs Wilcock said: “The priority for governors is to ensure that our pupils have the appropriate accommodation to meet their educational and special needs, whether this is on one or both of our sites.
"It is encouraging that West Sussex County Council has been able to identify funding to achieve this. We look forward to taking an active part in the feasibility study and working in partnership with the council.”