Cardiff council is to press ahead with plans to turn land around Llanishen Reservoir into a nature reserve, potentially preventing housing there.
Its executive board said the site is home to a wide array of wildlife.
Reservoir owner Western Power Distribution (WPD) has been trying for nine years to build homes there.
The company which called for a judicial review of an earlier attempt to declare the site a nature reserve would not comment on the council's plans.
But executive board member for culture and leisure Nigel Howells said the council would now press ahead with turning the site known as the Nant Fawr Corridor into a nature reserve.
He said the area was rich with wildlife including grass snakes, newts, frogs, toads, slow worms as well as a wide range of birds living in the woodland, parkland and wildflower meadows.
The proposal has the backing of the Countryside Council for Wales (CCW).
The area is also extensively used by ramblers, dog walkers and for nature study.
The idea of creating a local nature reserve was first looked at by the executive board last year.
But WPD called for a judicial review challenging the proposals and raising a number of queries relating to the plan.
Mr Howells said the council had addressed the issues and felt it was in a position to proceed with the nature reserve proposal.
"A number of technicalities were raised in regard to the process which the council feels it has now addressed and for this reason the council has now revisited its decision-making process," he said.
"This is an important wildlife corridor which is well used by the local community, who have supported the decision to make this corridor a designated nature reserve.
"If approved the decision will effectively link Roath Park up to the wider countryside giving an environment for wildlife to flourish."
WPD said it did not wish to comment.