ap photo A general view of the Sanxay-Gilmore House is seen Tuesday in Iowa City.

IOWA CITY — Iowa City and the University of Iowa have worked out a deal that will preserve a 177-year-old house while providing space for the university’s Nonfiction Writing Program.

The new location would be part of a “writing neighborhood” near two other historic buildings along Clinton Street that house the Iowa Writers’ Workshop and Iowa’s International Writing Program, the Cedar Rapids Gazette reported.

The city is offering the $1 million piece of property, which is currently a parking lot, at no cost to the university, but there will be a hefty price tag for moving the historic Sanxay-Gilmore House to the property. A city assessment put the cost of moving and renovating the structure at over $1.23 million, but university officials said the school plans to cover expenses with a “substantial gift.” Officials declined to give details on the donation.

The Iowa City Historic Preservation Commission and the City Council both approved the property transfer.

The university had planned to demolish the historic home, but city and preservation officials say the house is an important piece of Iowa City history. Built in 1843, it’s one of the oldest structures in Iowa City and is associated with the Sanxays — considered a founding family in Iowa City. In 2015, the preservation commission identified the Sanxay-Gilmore House as its top priority for historic landmark designation.