Edenburn House has been offered to the Department of Integration to house people fleeing the war in Ukraine.
It represents a U-turn by the current owners of the Ballymacelligott property, who had previously stated it would be used for private accommodation.
Edenburn House is an 18th century property, located on 18 acres in Ballymacelligott, between Tralee and Castleisland.
It housed tuberculosis patients between the 1930s and 1960s, and was also a place where the elderly went to convalesce, known as Edenburn Hospital, until its closure in 1988.
It was sold to a private buyer for €1.1 million in September last year, and refurbishment works had been taking place at the property.
The Department of Children, Equality, Disability, Integration and Youth, has now confirmed it received an offer of accommodation for Beneficiaries of Temporary Protection at Edenburn House.
It says the property has been offered to provide accommodation for people fleeing the war in Ukraine.
The property is now being assessed for its suitability for future use as accommodation for Beneficiaries of Temporary Protection following conversion and refurbishment works.
This is part of the Emergency Refurbishment (Ukraine) Project, overseen by the Department of Housing, Local Government and Heritage, and is likely to take a number of weeks.
It represents a U-turn by the property owners, who released a statement in January to say the property would be used for private accommodation.
At that time, the owners said two, three, and four-bed apartments would begin to come on the open market for letting to the public in February, as the estate was being refurbished.
There was speculation at that stage that the property would be used to accommodate people seeking international protection.
