RSPB Cymru and a housing association have joined forces to bid for the 23,000-acre Lake Vyrnwy estate in Powys, which is valued at £11m.
The RSPB, which has a nature reserve at the site, is working with Mid Wales Housing Association (MWH).
The land has been split into four lots and MWH is hoping to buy 31 properties up for sale, while the bird charity is bidding for the entire estate.
Last month businessman Rhys Jones placed a bid to buy the beauty spot.
The tendering process ended in September, and the new owner is expected to be announced later this month. It is understood there have been a number of inquiries from people and organisations interested in buying Lake Vyrnwy.
RSPB Cymru and MWH said their partnership would ensure the village on the estate, Llanwddyn, and other communities nearby would benefit from the sale.
RSPB Cymru's acting director Laurence Rose said: "We stand by our belief that the main purpose of the Vyrnwy estate is to provide public benefits, including clean drinking water, a high quality wildlife experience, a beautiful landscape in which to live, work and enjoy, and even reducing the amount of carbon lost to the atmosphere, helping in the fight against climate change.
"It is therefore essential the land remains under the management of organisations whose main purposes are to provide these benefits to the public and in particular ensure the best possible outcome for the local community."
Concerns have been raised about what the sale of the rural estate, which is owned by water company Severn Trent, would mean for its tenants.
Chief executive of MWH, Shane Perkins, said: "For its part, RSPB Cymru has the skills needed to manage the estate's varied habitats and in-hand farm, Tŷ Llwyd.
"Mid Wales Housing Association has similar strengths in the forms of property management and commitment to affordable housing. We are therefore convinced that the partnership is a natural fit and offers the best possible outcome for the local community.
"Not only will current residents be assured that their local environment will be looked after and their standard of living maintained, but also more affordable houses will be available for those wanting to stay in the area who are struggling to get on the property ladder."
The Liverpool Corporation built Lake Vyrnwy, a reservoir, in the late 19th Century to supply water to the city.
The land around the lake is being sold on a 125-year lease.
An online campaign has been launched with the aim of a million people buying £10 shares of the estate to ensure public access.
The earlier bidder for the estate Rhys Jones, is originally from near Bala, Gwynedd but now lives in Poland, and is chief executive of Celtic Property Development.