Colchester Borough Council have confirmed that Layer Road is set to be put up for sale in early spring.
The U's are set to move into the 10,000-capacity Colchester Community Stadium at Cuckoo Farm by next season.
The council's estates manager Gillian Bellenie said: "Work is being carried out with a view to putting the Layer Road site on the market in the spring.
"The council envisage a residential community with a range of houses and flats built around a central square."
Bellenie added: "The timing is being carefully planned so that the football club are not required to move from the existing ground until the new stadium is ready."
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