Work on demolishing the first of five buildings on the historic site is scheduled to go ahead, subject to permission from the police and fire brigade following Friday night's mystery blaze.
After 19 years standing empty, much of the former orphanage and its adjacent Mount Street Hospital are due to be transformed into luxury homes.
The Grade II Listed tower and chapel will remain and incorporated in the new housing complex which will have 10 town houses and 60 apartments.
The orphanage was first opened in September 1872 on the site of an almshouse.
St Joseph's Hospital for the Sick and Poor, which eventually became Mount Street Private Hospital, opened next door five years later.
Both were built by wealthy widow Maria Holland who gave £10,000 for each project at a time when Preston had one of the worst mortality rates in the country due to poor housing and low-paid mill workers.
Run by nuns from the Sisters of Charity of Our Lady Mother of Mercy, St Joseph's was the first welfare provider for Catholic girls in Preston, taking up to 60 youngsters at a time in two dormitories.
During its 82 years as an orphanage it looked after almost 1,000 children before it closed in 1954.
The top floor continued to serve as accommodation for the nuns who worked in St Joseph's Hospital, known locally as Mount Street Hospital.
During both world wars they tended injured soldiers and over the years tens of thousands of babies were born in the hospital's maternity unit.
Legendary performer George Formby died in a private room at the hospital on March 6, 1961 after suffering a heart attack.
The hospital closed in 1982 when the sisters left nursing. It became a private care home which eventually shut down in 2003, leaving the whole complex empty and run down.
Several projects have been suggested over the last 19 years and now it looks like the site’s future is secure with plans to turn the complex into luxury homes.