Partners behind the ambitious plans are hoping to secure £12.8 million from the Heritage Lottery Fund and have now submitted their application.
They are also hoping to gain £6.6 million from a bid to the European Regional Development Fund.
Decisions on both bids are due this summer, with work on the site potentially beginning in September – as long as the applications are successful.
In May 2011, a bid for funding from the HLF failed – putting the long anticipated plans for the regeneration of the Flax Mill site on hold once again.
But last year, the organisation awarded the project a first round pass and more than £465,000 to spend on developing their plans for this year's bid.
Partners – made up of Shropshire Council, English Heritage, the Friends of the Flax Mill Maltings, and the Homes and Communities Agency – said today they are 'confident' funding will be secured.
Over the past six months the partners have been busy preparing the second round bid, and a number of supporting plans and documents – work that would normally take at least 18 months to complete.
If the money for the scheme is granted, work will start to restore and bring back into use some of the main historic buildings at the site – including the Main Mill, the Kiln, the Dye and Stove House and the Office and Stables.
A completion date for the first phase of the work has been earmarked for 2016.
Andy Evans, Shropshire Council's head of economic growth and prosperity, said: "To complete 18 months of work in just six months is a fantastic achievement, and a lot of credit and thanks must go to all who have worked so hard to prepare this bid, the supporting business plan and interpretation plan, and other supporting documents.
"We have put together a really strong bid and are confident that it will be successful."
Alan Mosley, chairman of the Friends of the Flaxmill Maltings, said: "This is the culmination of three years hard work on the project and congratulations to all involved.
"The Friends are proud of their critical role in getting to this point, it's real red letter day for the local area, Shrewsbury and beyond," he added.
"We are confident of success which will have a tremendous regeneration impact and result in much enhanced facilities for learning, work and community activities."
Campaigners hope to see businesses, arts groups, bars, restaurants and eventually homes created at the site, which has been derelict for almost 30 years.