Homes for hundreds of students could be built on the site of the Territorial Army's Slade Park barracks in Oxford.
The property arm of the Ministry of Defence has submitted an outline planning application for the multi-million-pound development in Headington.
The proceeds would be used to build a new county TA centre, possibly at Dalton Barracks in Abingdon.
The plan has prompted residents to question the need for proposed development on the greenfield Warneford Meadows site.
Defence Estates has applied to demolish the barracks, which has been home to the TA since the 1950s. It would make way for a complex consisting of blocks of flats containing 276 student rooms, along with 32 flats and 21 houses for other residents.
It is the latest in a series of planning applications for student homes in the area.
The site in Mascall Avenue is owned by Oxford City Council but the MoD's lease still has 20 years to run. The ministry plans to sell on the lease if planning permission is granted.
In its application, Defence Estates says: "It is proposed to build a new TA Centre within Oxfordshire, provided that this site can be sold to generate funds.
"Assuming that outline consent is obtained by the autumn, the site could be sold shortly after that, with detailed plans following. Development could start as early as next year, perhaps in phases, and be complete during the following two years."
City council planning officer Murray Hancock said: "It's not a site that we anticipated coming forward now.
"But we understand that the MoD wants to consolidate its facilities at Dalton Barracks in Abingdon and no longer requires it."
Tony Joyce, chairman of the coordinating committee of Headington Residents' Associations, said: "We can assume that most of the students at The Slade would be going to Oxford Brookes University. This raises the issue of all these students having to travel through Headington to get there."
He added: "We must now ask whether the huge amount of building proposed on the greenfield Warneford Meadows site is still justified."
A plan to develop the meadows and the Park Hospital site could create flats for more than 2,000 students.
Residents expressed anger earlier this month about an application by developers to demolish Dorset House, in London Road, Headington, and build flats for 363 students. The accommodation is expected to be taken up by Oxford Brookes University students.
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