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English Heritage will have greater freedom to make use of the former King Edward VII convalescent home at Osborne House.
The convalescent home was restricted by the Osborne Estate Acts of 1902 and 1914 to be used for the benefit of service people, their families and senior civil servants.
However, an amendment to the Act passed through the House of Commons, giving English Heritage more freedom regarding its use.
The Island’s MP Andrew Turner spoke in favour of the amendment.
He said: “This is significant progress towards a new future for this important part of Osborne House.
"There are still a number of stages to go through before the Bill becomes law but at present I don’t anticipate any problems.
"The unused parts of the house are currently costing English Heritage around £60,000 a year to maintain – so as well as breathing new life into this important visitor attraction that money will be better used.”
The convalescent home closed in 2000 and that part of the building has remained unused ever since.
Mark Pemberton, director of national collections at English Heritage also welcomed the development.
He said: "English Heritage is delighted the amendment to the Osborne Estate Act passed through the House of Commons this week.
"Although it still needs the support of the House of Lords and Royal Assent, this is a significant milestone and we are enormously grateful to Andrew Turner MP for his support in gaining this amendment."
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