The Vine forms part of the government-funded Towns Deal programme, where money is ring-fenced for particular projects to breath new life into urban areas.
The original plan was to house it in the shop once home to TK Maxx, which is now being put on the market.
Three different locations for The Vine are instead being considered: Central Library on Broadway, The Goods Shed in Fletton Quays and Peterscourt on City Road.
If a contract is approved, Central Library will get a £6.8m revamp of its ground floor, with a new space for education and what has been described as “community-based cultural activities”.
The Goods Shed, a disused railway shed in Fletton Quays, would turn into a food and drinks hall, with offices and workspaces.
The £1.2m project for Peterscourt would refurbish the Grade II listed building into a space for businesses, such as start-ups and early-stage companies.
The Vine is the largest of eight Towns Fund projects in Peterborough.
The other seven schemes include a pedestrian bridge over the River Nene, an activity centre at Nene Park and a green technology centre at Peterborough College.
