The £15 million scheme will transform the Grade II*-listed 1930s municipal-style building into a new development which will include an independent cinema and 143 homes.
Providing the bulk of the proposed housing will be the town hall's current car-park site, which will offer space for a four-storey building. At least 50 per cent of the housing will be affordable.
The cinema will consist of three screens, and an extension to the town hall roof is being proposed to house two of them.
The scheme will also offer cafés, shops, business units and performance and rehearsal spaces.
The building, which is set back from vibrant high street The Broadway, will be unlocked by creating new public routes through and around the structure linking the surrounding residential areas via a series of public spaces, created through significant landscaping.
The project will be funded in part by the selling off of the public car park to create residential units, but it is likely at least a further £3.5 million will need to be raised by the Heritage Lottery Fund.
If all goes to plan, and the money needed is raised in time, work will begin in early 2008.
DSDHA plans transformation of Grade II-listed London town hall - images