Preston bus station is set to be bulldozed after a bill to refurbish it came in at £23m.
The city council said it would cost £5.4m just to make essential repairs on the 1960s building.
With a development budget of £5m for the whole city, leader Cllr Peter Rankin said demolishing the landmark was the "difficult, but obvious choice."
He said: "This is a truly difficult decision for the council.
"I do understand why some people like the building and want to keep it.
"It is a building that creates strong emotions both for and against.
"Certainly as a council we have looked at and explored the option of investing and refurbishing the current bus station building."
He said the council had decided to use the money to "spearhead development" in Preston city centre.
He said: "We can only spend this money once, and repairing the bus station would take all the council’s money and more.
"This would leave other vitally important projects like refurbishing Preston Market high and dry.
"We simply cannot and will not do this to Preston or to the market traders for the sake of a building, albeit one that divides opinion and has its admirers."
The building costs £300,000 a year to run.
Cllr Rankin said bulldozing it and building a "a new modern, fit for purpose bus station simply delivers better value for money to taxpayers."
Councillors are recommended to approve the demolition at a meeting on December 17.