Alan Boyson’s fish mural will be removed before demolition of the Albion Square site and integrated into the new £120m development.
The mural is currently located on one of the upper floors of the former Co-Op Building.
Its safe removal is possible because the mural is not part of the structure of the building.
Councillor Daren Hale, portfolio holder for regeneration and economic development, said: “Our aim has always been to retain these incredible artworks where possible, so I’m delighted that we can confirm that it is possible to retain the fish mural.
“It’s fantastic that, through these artworks, Hull’s history and cultural heritage can play an important role in what is an exciting part of the city’s future.”
The method of removing the mural will be discussed at a council scrutiny meeting on Thursday 17 October.
The fish mural formally sat on a corridor of the Romeo and Juliet’s nightclub. It has been out of public sight for decades on one of the upper floors of the Co-Op Building.