Dublin City Council has begun the process to bring Iveagh Markets back into its possession.
The iconic building on Francis Street in the Liberties has been empty and become derelict over the past 20 years.
Developer Martin Keane had been expected to transform the historic site but the council has now said it is prepared to take legal action to regain ownership.
He had previously paid €2 million for a leasehold title, but failed to develop the site after receiving planning permission.
Had the plans gone ahead, it would have seen the Iveagh Markets turned into a European style food hall.
But planning permission lapsed, and now the council fear Mr Keane does not have the funds to re-develop the site which needs extensive refurbishment work.
In a letter to councillors the council said it is prepared to refund the €2 million paid by Mr Keane, repossess the site and take back ownership and head to court if necessary.
The market, which is over 113 years old, is expected to cost around €13 million to stabilise among €30 million worth of repairs.
It was originally owned by the Guinness trust after being built by the family for street traders in Dublin 8.
Local Labour councillor Rebecca Moynihan welcomed the move by the council to take back the building.
She said: "“The Iveagh Markets have fallen into a serious state of dereliction. The building needs to be secured and made structurally sound as a matter of urgency.
"It is time for the City Council to step in and develop this site and bring it back into use as a fully functional market in line with the history of the area.
“There's a real need for market space over that area. Taking back and developing the Iveagh Markets will be a complete game changer for the Francis Street and Liberties area."
