Emma Taylor, council strategic director, said the Office of Road and Rail had told Network Rail that any redevelopment would have to see a lost parking space replaced, one for one.
Ms Taylor said analysis had shown that despite inflation, soaring construction costs and high interest rates development in the Carfax area and the Cattle Market would be viable.
"Because of the economic climate now is the right time to do development work. Once we are ready in two or three years' time hopefully a change of economic climate for the better we will be ready with a scheme to move forward."
Council leader Martin Tod said any development on Gladstone Street would be linked to new park and ride sites to the north of Winchester, at Kings Barton, and potentially Sir John Moore Barracks.
The scheme has a chequered history with previous plans derailed by councillor revolt, legal challenges and Covid. Cllr Tod said: "One of the reasons projects in Winchester take time is the need to take people with you, to hear what they say and put in plans that address those concerns."
Cllr Caroline Horrill, Conservative group leader, was disappointed about Network Rail's decision. Their involvement had been a "real positive - how can we achieve our aims in terms of an entrance to the city, that vital transport hub, if they have decided not to develop their land holdings. We do the hard work and they say 'maybe'. Are our plans half-baked if they are not with us? Their decision is fundamentally changing the dynamics of this."
Cllr Brian Laming asked why new offices were being proposed when there are several large ones empty such as nearby Cromwell House and the former Denplan office.
The meeting was told that many empty offices are not suitable for modern post-Covid requirements, of high-quality with extra facilities attached.
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