The listed building, at 3-5 Legge Lane, was completed in the 1890s for AH Woodward and until recently was run by Ashton & Moore as an anodising and powder coating factory.
New plans have now been lodged by Stourbridge-based developer Kendrick Homes to part-demolish the building and create 20 flats and four commercial units.
The 16,320 sq ft complex would be built around a central courtyard with parking and would contain 14 two-bedroom and six one-bedroom flats and commercial units on the ground and first floors of between 310 and 1,038 sq ft.
Kendrick's design manager Andrew Cockayne told the Post: "The site has been vacant since 2008.
"We're going to be demolishing part of it, namely the newer section which was built in the 1960s and reaches back to the rear of the building. However, we will be maintaining the historic façade.
"At present, we don't know what we plan to do with the flats once completed but there's every chance they will be put onto the market for private sale.
"This isn't our first foray into restoration projects as we did one in nearby Newhall Hill and we're keen to diversify but we do normally specialise in new builds.
"That said, we see this as a great opportunity now things are getting better in the economy."
The project will breathe much-needed new life into a neglected street in the Jewellery Quarter as several of the buildings there are either unused or derelict.
The application site sits opposite 20-21 Legge Lane which was placed on the market last year after a previous project to turn it into a food school never came to fruition while neighbouring 6 Legge Lane is also Grade II listed and used to have terrace housing but has fallen into a state of severe disrepair.
Shropshire-based consultancy Strata Associates, writing in a heritage statement for Kendrick's application, said "it would hopefully be a catalyst for regeneration".
Buildings 3, 4 and 5 Legge Lane were constructed in the 1890s and designed by architecture firm Essex, Nicol and Goodman which was considered a leading exponent of using terracotta decoration in the 19th century.
The whole complex was awarded Grade II listed in 1982 although its terracotta façade is the only section referenced in the listing, something Strata called of "significant architectural and historical interest".
Its report added: "Essex, Nicol and Goodman were noted as being one of the first architects in the city to make extensive use of terracotta in buildings, mainly of late Gothic or varying types of Renaissance design.
"Terracotta brick was particularly suited to Birmingham as it made up for the lack of local building stone available in the area and it was also resistant to smoke and soot.
"The Legge Lane building was designed for AH Woodward for the manufacture of pens, pen holders and pencil cases.
"It was constructed in 1893 as a purpose built factory and is heralded for its Dutch gabled terracotta façade and symmetrical detailing."