The land at Sidney Road and Charlton Rise is at a gateway to the town and provides residents with a valuable green space, say councillors.
A move to register the land as a town green is set to be approved at a meeting of Shropshire Council's southern planning committee next week.
Councillor Tracey Huffer, a Shropshire councillor for Ludlow East, including Sydney Road Green, said: “I am really pleased that this saga is coming to an end after six years.
"The green is an important open space for Ludlow and is part of the gateway into the town from the east. It is really valued by people who live nearby and people who stroll across it on the way in and out of town.
“I hope that Ludlow Town Council will consider planting new trees and allowing some areas to grow as a wildflower meadow. I’d like to thank Connexus for protecting the green and the town council for agreeing to take ownership.”
Connexus Homes applied earlier this year to register the land as a town green despite having permission to build five bungalows there. The move had been proposed by councillors Tracey Huffer and Andy Boddington and means the land can never be built on without applying to the courts.
The land is set to be sold to Ludlow Town Council for £1.
Councillor Boddington said: "Once the land is transferred, Ludlow Town Council is expected to decide on the maintenance regime and any planting, including a replacement for the Norway Maple that was felled in October 2016."