Preston Council and South Ribble Council are locked in talks about opening the skate park at Penwortham Holme, off Liverpool Road in Penwortham.
There is an urgent demand for a purpose-built park because skateboarders currently congregate in the city centre, sparking complaints from traders and shoppers.
Today the Chief Supt of Preston Police, Mike Barton, backed the plans.
He said: "I don't think it is entirely appropriate for skateboarders to be using the cenotaph as a home in the city centre and I would support any plans for a new park.
"I think it is wonderful that a move is being made to give young people in the area sports facilities. But it is crucial they are given a say in how it is designed to ensure it is a success."
Diane Smeaton, assistant manager at The Assembly on Lune Street, said skateboarders congregating outside her pub has put people off coming in. She said: "A new skate park will be safer for them as, currently, they are using railings and the edges of the statues at the Corn Exchange."
One city centre trader, who asked not to be named, said: "I think I speak for all traders near to Lune Street when I say this is great news.
"On a busy Saturday you get hundreds of youngsters skating around the area. At half-term it is even worse. People find the skateboarders intimidating and some shoppers steer clear of this end of the city centre."
Coun Michael Lavalette, who represents the city centre, said: "There has been a lot of skateboarders using the area after other facilities closed down. Most of them are great kids just looking for something to do."
The Evening Post understands that bids for funding for the park will be made to Sport England which finances sports projects across the UK.
The land on Penwortham Holme is used by a number of football clubs and the council hopes to open the outdoor skate park without impacting on the soccer facilities.
Coun Matthew Tomlinson, South Ribble Council cabinet member with responsibility for cultural and community services said: "Last June, we entered a long term partnership with Serco Leisure that will see all recreation facilities in the borough developed.
"As part of this we invited representatives from Preston Council to discuss potential improvements that could complement existing facilities at Penwortham Holme.
"One suggestion was to consider a skate park for the area.
"It was agreed that South Ribble Council and Serco would work together to conduct a feasibility study. This study is now underway."
A spokesman for Preston Council said: "We already have plans to build some skating facilities in Ribbleton, but we also want to set up a larger skate park giving even more opportunities for people to get involved.
"One option we are considering is the possibility of setting up a skate park on Penwortham Holme."
A spokesman for Sport England said: "We have received no application on this matter yet, but skate parks are projects we fund and any bid would be given full consideration."
Today's news comes three weeks after skateboarders complained they were being kept in the dark over plans for a new facility on Ribbleton Park off Blackpool Road, Preston.
This facility – which will cost £40,000 – is a smaller-scale project and will go ahead alongside any new development at Penwortham Holme.
Last month Chris Davison of the Preston Skatepark Project said that local boarders were keen to see a new facility provided in the area.