Wooler Parish Council has been pressing for land at the former first school site to be allocated for a cemetery extension for several years.
It is understood there are only a handful of plots remaining in the neighbouring burial ground.
Now, an application seeking change of use from school field to cemetery has been submitted to Northumberland County Council
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A request for a community asset transfer is also being progressed, while approval for the change is also needed from the Department for Education.
It is also planned to demolish the former school buildings and create additional parking to cope with the expected increase in visitors to the town when the Ad Gefrin distillery opens later this year.
Cllr Mark Mather, Wooler ward county councillor, said: “This has been going on for a long time but I am pleased that the county council are now fully supporting the extension of the cemetery and realise its importance.
"The field at the back of the school is right next to the existing site and has been identified by the parish council as a suitable location. They are working alongside the Parochial Church Council (PCC) to get that done.
"We need a fit-for-purpose burial ground that will keep us going for another 100 years or more and this is a beautiful location for it.
"My understanding is that there are 10 or less spaces left in the cemetery so there is a significant time pressure on this.”
Cllr Mather continued: “If it all goes to plan we’re going to demolish the school and put temporary parking there so the town can cope with the influx of visitors to Ad Gefrin when it opens and the extra holidaymakers we expect to start coming.”
The site has been disused since the first school moved to a shared site with Glendale Middle School on Brewery Road in 2015.
The county council had previously considered the wider site suitable for housing but no firm proposals were forthcoming. Other suggested uses for the site have included residential elderly care bungalows and a crematorium.