The government intends to rehabilitate Fort Campbell and the area around it in Selmun, Prime Minister Joseph Muscat said.
The fire control position at Fort Campbell, vandalised some years ago.
He said talks were still in an initial stage and the government did not exclude issuing a call for expressions of interest in the area.
Fort Campbell was the large major fortification built by the British forces. It was built before the second world war, with its design being such as to blend with the environment, particularly as seen from the air.
Although its primary role was coastal defence, it had an important role in air defence, protecting British seaplanes which landed in Mistra Bay near by.
The fort has been abandoned for many years and has been heavily vandalised.