The £47m sale of the Houndshill Centre to Blackpool Council has secured a major asset for the town - with the added prospect of attracting new high street names.
Alan Cavill, director of regeneration at the council, said the move made sense despite fears over the future of traditional retail trading.
He said: "Occupancy levels are well over 90 per cent and always have been.
"We know exactly how long all the leases are and what state they are in and very few are behind on their rent.
"Blackpool is also in the unusual position for a town of its size of only having one shopping centre, so it is not competing with other centres which pushes rents down."
He added around 40 shopping centres, including some in the North West, were already in local authority ownership meaning the council's purchase was 'not unusual'.
The council paid £47.6m for the Houndshill – less than half of the £105m previous owner BCC Eiffel spent buying the complex in 2015 - with the money coming from prudential borrowing.
It stepped in after lender Deutsche Pfandbriefbank AG foreclosed on its loan to the company and receivers were appointed.
London-based experts including CBRE, a leading real estate advisor for the retail sector, and legal specialists DAC Beachcroft, were consulted ahead of the deal.
Mr Cavill said the financial difficulties had prevented investment in the centre, whose anchor store is Debenhams, and efforts to bring in new tenants had stalled.
He said: "There is demand for units from some big name brands, but without investment the centre has been unable to negotiate deals to bring them in.
"We know they were not in a position to do any deals or improvements which was not great for the future of the Houndshill.
"In the intervening years we have lost people who have wanted to come to the centre.
"All the perceived wisdom is that retailers are now getting used to the changes which have happened in the sector with companies such as Next having successfully integrated its online and high street business really well.
"People do still want to visit the high street and touch and feel things before they buy.
"Shopping is also still part of the leisure experience and visitors to Blackpool will want to shop as part of their trip here, and it's also about providing a centre for local people and attracting people back here from shopping elsewhere.
"But we have not just thought this up ourselves - the council has taken advice from leading specialists in the retail sector."
The purchase also sees the council take ownership of the 770-space multi-storey car park and will hopefully unlock the second phase of the Houndshill’s development, which will include restaurants and a cinema.
Michael Williams, chairman of Blackpool BID (Blackpool Improvement District), said the purchase was "a bold but welcome acquisition. "
He added: "The Houndshill is a very important element of the town centre and to ensure its future is essential for the success of the resort's shopping offer.
"Hopefully, the development of Tower Street will now proceed which will include the introduction of a cinema and additional retail and restaurant offers, which can only be good news for the early evening economy.
"This could also be the catalyst to secure investment from the Future High Streets Fund and Town Fund which see major investment and development across the Town Centre."
But Coun Tony Williams, leader of the Conservatives on the council, said he believed the deal had only been done to rescue the tram extension which needs the Wilko's store to relocate before it can progress.
He said: "I am amazed and annoyed the council is claiming that by buying the Houndshill Centre they will be securing retail in the town for the benefits of the residents.
"Nothing could be further from the truth.
"The only way they can finish the most expensive tram extension in the world is to find an alternative location for Wilkinson’s.
"My guess is by purchasing the Houndshill Centre at an over market price is to enable them to find a home for Wilkinson’s so the embarrassing delay and mismanagement of the tram extension can be finally completed."
The management company that operated the centre on behalf of the previous owners is expected to remain in place for an interim period until the council has determined more permanent arrangements.