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Approval on the site of the theatre and next steps will be discussed at a meeting on 13 November.
In a statement released on Thursday afternoon, the council said a committee of councillors had concluded the bus station site at Kimmerfields is "the only suitable site" for the venue.
This is due to the accessibility of a new bus station on Fleming Way.
A proposal for the building has been drawn up by specialist entertainment architect Stufish with an estimated cost of construction of just under £35m, although this could change.
The paper by Stufish shows the entertainment venue would be built on what is now Swindon Bus Station, off Manchester Road, next to the Tri-Centre building complex.
Picture credit: STUFISH
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