Town hall bosses have given up trying to find tenants for retail units which have been empty ever since they were built five years ago.
The council-owned shops in Cookson Street will now be converted to office space instead.
Planning approval has been granted for the change of use of two ground floor units in Bickerstaffe House.
Tenants have never been found for the space since 2014 when Bickerstaffe House opened to accommodate council workers as part of the first phase of the Talbot Gateway project to regenerate the town centre.
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A council planning report admits "Cookson Street doesn't benefit from the same high levels of footfall as the Talbot Road frontage and smaller scale retail units aren't high in demand on the periphery of the town centre."
The report adds: "Bringing these two empty units into beneficial use weighs heavily in favour of the proposal and offices would complement the overall mix of Bickerstaffe House."
The building is also home to more than 200 insurance company workers as well as council staff.
Failure to find tenants for the units has been criticised over the years.
Coun Tony Williams, leader of the Conservatives on Blackpool Council, said the council had "finally realised" the units "were neither suitable or in the right place to support retail space."
He added: "The council set up an expensively equipped gym on the lower corner which failed almost immediately.
"Surely that should have set the alarm bells ringing, and their excuse for the non take-up of these units was always 'we cant find the right type of tenant'.
"Now the truth is out they couldn't find any tenants.
"These units have lain barren for years when they could have been bringing in valuable rent revenue to the council."
Speaking at a meeting of the tourism, economy and communities scrutiny committee in October, the council's director of regeneration Alan Cavill said there had been demand for the units but it had not been deemed the right kind of use for the area.