Doncaster Council's cabinet has agreed to provide a site for the proposed school on land near to the existing Hungerhill School, in Edenthorpe, with a 125 year lease on a peppercorn rent.
The Government is now looking for a trust to sponsor the school, which would be on a five acre site on the Hungerhill Enterprise Park.
The cabinet has also given senior council officers the go-ahead to negotiate terms with a sponsor trust, and enter into a lease and grant funding arrangements with the Department for Education.
Damien Allen, the director of learning at Doncaster Council, said in a report: "The proposal is to establish a Special School for Communication and Interaction in the borough. This would be a free school which would legally be an academy and so be a state funded school.
"Such schools are held accountable through a funding agreement between the Secretary of State for Education and the Academy Trust which operates the school. They differ from academies in that they are completely new schools established to meet local demand."
He said the council had previously identified a shortage in provision within the borough for specialist places for complex needs for communication and interaction - mostly high functioning autism spectrum disorder and Asperger’s syndrome, with related social emotional and mental health needs.
Some children may also have specific learning difficulties as an additional need but will not have significant learning difficulties.
The council's plan would see a 100 place school set up. It is expected to provide up to 80 places for use by Doncaster Council, as well as 20 places for usage by neighbouring councils.
Doncaster has already put in a bid with the Government for backing for the scheme. In May, Doncaster was one of 22 authorities which was told they could move on to put forwards a proposal.
Now the Government has said it will advertise the opportunity to sponsor the school and if a strong proposal comes forward that both the council and the Secretary of State wish to take forward, the DfE will provide capital and start-up grant funding.
Mr Allen told the cabinet: "This is good news for Doncaster.
"We are having a growing demand in this area.
"It brings with it an ability to meet a need sooner than anticipated. We won't have to send young people out of the borough for particular specialist requirements.
"We have identified a site."
Cabinet member for education Nula Fennelly said: "I welcome this. It is a much needed asset for Doncaster and it will help give our children the best possible start the could have."
Doncaster historically had a special school for autistic children at Rossington Hall. But it was closed in 2008 as part of a re-organisation of special education.