The proposed scheme in Glenrothes would supply low carbon heat to a range of business, community, public sector and domestic customers in the town centre.
The council will meet next week to approve officers proceeding with detailed design, costings and developing the final business case for this scheme.
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In addition, a consultation will take place for local residents between 3.30pm and 8pm at Rothes Halls on Wednesday, 29 March.
Barbara Whiting, Lead Officer for Renewables, said: "Glenrothes Heat could contribute significantly to our climate change targets and could potentially reduce fuel poverty in Glenrothes households and provide cost savings for businesses.
"The consultation period will allow anyone affected by these plans to engage in the process and share their views. Anyone interested in this project is invited to attend our consultation event on 29 March."
(LM/JP)
