Tenants in the Cherwell district will be asked to vote on the transfer of their 4,000 council homes to a housing association.
A ballot is likely to be held next autumn and the houses could be transferred by May or June in 2003.
Cherwell District Council's executive has decided to apply to go on the Government's transfer list.
Andrew Fulljames the council's executive member for housing, said: "The Government's handling of council houses means we cannot just do nothing. We believe that going for the transfer is the best option to ensure that our tenants can live in decent housing."
He said the council could not afford to fully renovate the 4,000 homes, but could only do minor repairs.
A report showed that the council would need £43m over the next ten years to make major improvements to its housing stock.
Mr Fulljames added: "The council will still be responsible for housing policy such as the homeless. It is not actually a council's job to be a housing landlord.
"The Government has to give approval and could say it wants to handle transfers in other parts of the country first.
"But if our application goes through, I cannot see any actual transfer happening until May or June, 2003, at the earliest."
The 4,000 homes represent the tenants in the Cherwell district who did not transfer to a housing association a few years ago.
All the other district councils in Oxfordshire, except Oxford City, have already opted for the complete transfer of their housing stock to housing associations.
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