Plans to open a Co-operative store in a landmark Cowfold pub include building nine houses on site and converting the first floor into three flats.
Pegasus Group, agents for the scheme, has written to neighbouring properties in The Street to inform people of its plans.
The pub closed almost a year ago and has been boarded up ever since.
Plans for the site of the former pub were exclusively revealed in the County Times two weeks ago.
The Co-op confirmed it was in negotiations with the developer but said it was too early to confirm any details.
An application for a single-storey flat roof extension to the main building was permitted by Horsham District Council earlier this year.
However, an application for the additional houses has yet to be submitted to HDC.
Under the proposals the first floor of The Coach House would be split up into three separate flats.
The outbuildings would be converted into three mews houses and land to the rear of the former pub would accommodate the six semi-detached houses.
The scheme includes 13 parking spaces for the Co-op store and 16 spaces to serve the 12 residential properties.
In the letter to residents Jim Tarzey, a director at Pegasus, said he was happy to meet representatives from the community before any planning application was formally submitted to discuss proposals with villagers.