The theatre will form part of a new development on Somerleyton Road in Brixton, standing alongside over 280 new homes and a host of community-centred start-ups.
According to the website for Brixton Green, one of the partners in the project, "People want this space to do a lot of things. With your help we can make this happen in a different and exciting way – bringing out the best of Brixton."
Ovalhouse, which is currently situated opposite the Oval cricket ground, will "bring a range of theatre and youth arts activities to contribute to Brixton's cultural heritage."
A spokesperson for the venue told WhatsOnStage: "We're absolutely delighted that we're part of this. At the earliest we will be relocating in 2016, but it depends on factors beyond our control.
"Procurement [the next stage of the process] starts soon and they'll be making firm decisions around April 2014. A couple of years after that the building work will be completed."
The Somerleyton Road Project is part of the Future Brixton programme. According to Lambeth Council, it marks a "positive development for Brixton which would bring affordable homes, new jobs and cultural space to the area".
The plan is the latest in a series of developments that have transformed Brixton in recent years. Brixton Village, a covered market off Atlantic Road, has become home to a number of acclaimed eateries.
This has led to accusations of 'gentrification', and reports that current Brixton residents are being priced out of the area.
Ovalhouse were keen to point out that the Somerleyton Road Project is aimed at providing affordable housing and culture for the current Brixton community.
"Anybody who knows Ovalhouse knows that our work is rooted in the community," they said.
A ‘Walk & Talk' event to promote the project was held last month. According to the Brixton Green website, "So many people said how happy they were seeing the Somerleyton Passage being made into a positive place."
According to plans Ovalhouse will be housed in a brand new building at the corner of Somerleyton Road and Coldharbour Lane, adjacent to Brixton Village.
Other proposed developments on the site include a community TV/radio station and chef's school, as well as 'pop-up shops for local start-ups'.
Ovalhouse director Deborah Bestwick said of the move: "We need a fit-for-purpose building to present our diverse theatre programme to run our young people's projects, for community use, to hold rehearsals and training. We also want to open affordable units for small scale creative enterprises. Somerleyton Road would make an ideal site for our work."
Plans for Ovalhouse's current building, which is owned by the venue, are still to be confirmed.
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