Owners of The Rose of Farington in Stanifield Lane, Farington, want to change the use from a drinking establishment to residential, including building an extension following demolition of an existing rear extension.
Despite the planning application stating the building is a "former" pub, it is still currently trading.
A spokesman told the Post: "The freehold of the pub is owned by someone else and they are applying for planning - we were made aware of this in advance.
"The pub is open and will remain open until any plans are approved and the freeholder wishes to proceed with any development."
In a statement to the council, Graham Anthony Associates, on behalf of Fylde Investments Ltd, said: "The Rose of Farington has been struggling commercial for a number of years and in accordance with the aims of both the development plan and the framework, this application seeks to revitalise the site.
"There are several reasons for this: increase in running costs, limited scope for developing income streams, individual drinking habits changing - socialising at home/garden.
"Furthermore, the impact of Covid has seen the pub industry suffer terribly. Competing venues in the area have benefitted from continued investment, cultivating a reputation as family dining establishments and there has been an explosion of smaller craft ale and cocktail bars as customers seek something different from the traditional public house."
The agent added: "The proposed development would create new households which would, in turn, generate an uplift in demand for local shops and services.
"The construction of the proposed development would also generate additional expenditure in the local economy."
While no timeframe has been announced, the statement goes onto say: "Subject to planning permission being granted, the development would be delivered within the short term."
The site has a dedicated car park to the south which can accommodate a minimum of nine vehicles, which would be retained.
The application states: "While this falls short of the desired parking standards the site is also close to the Leyland Railway Station and is on a main bus route and close to shops and other amenities located in the Farington Local Centre. Therefore, the site is in a highly sustainable location where future residents are not obligated to buy a car."