Waverley Square, on the former Orgreave coking plant site, has been axed, three years after it won planning permission and a year after it received a £7m grant from taxpayers to kickstart construction.
It was set to include shops, offices and leisure facilities, a transport interchange and a medical centre.
Some 2,500 people live in 1,000 houses on the giant reclaimed site just off the Parkway.
But earlier this year, landowner Harworth Group and developer Dransfield Properties ditched the plans due to the impact of lockdown on retail. A Harworth spokesman said the £7m had been returned.
Harworth quickly went back to the drawing board and has gone it alone with a smaller scheme described as being modelled on Sharrow Vale, a popular independent shopping district in Sheffield, but without the cars.
The plans comprise a gym, offices, restaurants and cafes, a supermarket, medical centre, community space, bus hub and more than 160 houses.
But the focus will be on small independent businesses, pop-up markets and pedestrians.
The new development, called Olive Lane, is set to be on 10 acres between the Advanced Manufacturing Park and the existing residential area.
Harworth hopes to submit a planning application in 2021 and is seeking occupiers. The company is self-funding the scheme but has not put a value on the cost of it.
Duncan Armstrong-Payne, associate director for major projects, said: “The importance of strong communities and the need for liveable, walkable neighbourhoods is central to our vision, which has been reinforced by the COVID-19 pandemic.”
Waverley is Yorkshire’s largest brownfield redevelopment, with outline consent for 3,890 houses.
The scheme has been designed by Harworth, Coda Architecture, PWP Landscape Design and BE Design.
The Star contacted Dransfield Properties for comment.