The fast-food outlet would go on the site of the Papas Fish and Chip restaurant in Eastfield, and would also include a separate coffee chain.
The details were revealed in a Scarborough Council document as the authority needs to lift a restrictive covenant on the land to allow the development to go forward.
A report prepared for the council’s portfolio holder for economy, communities and commercial, Cllr Liz Colling (Lab), on Tuesday next week stated: “The site is located off the roundabout opposite Sirius’s head office, adjacent to the Morrisons supermarket at Eastfield.
“It is proposed for redevelopment following the closure of the Papas Fish and Chip restaurant and is under offer to create a new KFC drive-through and a separate free-standing Costa Coffee subject to planning which is currently under discussion.
“The estates and strategic land team were requested to release a restrictive covenant that was included in the title for the benefit of the council’s residual landholding in the surrounding location.
“The developer sees this release being crucial to enabling the development to proceed and as its release creates value they have offered to make a capital payment to Scarborough Borough Council in return for this release.
“Agreement has been reached as to the payment following extensive negotiations between the parties.”
Papas recently moved into the former Harry Ramsden property in the town’s South Bay seafront, and company director Dino Papas told the Local Democracy Reporting Service that closing the Eastfield restaurant was part of the deal.
He said: “We got the Ramsden’s property and as part of the deal we would give up the Eastfield site.
“The deal has taken longer to complete for this part so we don’t know when we will be closing in Eastfield but it is very imminent.
“We wanted to be on the seafront, people come to Scarborough seafront for their fish and chips, not out near Morrisons.”
The Eastfield property was formerly The Scarborough public house.