The Open University is considering setting up a new "sustainable green" campus and offering on-site teaching.
A business case is being drawn up to relocate the OU to central Milton Keynes, next to the train station.
The proposal also includes a "sister university" for people who want to study courses in person.
Since 1969, the Open University has provided distance learning to more than 2.3 million students.
The multi-million pound proposal is described as a "smart, accessible and energy-efficient campus" on land owned by the Milton Keynes Development Partnership.
It would include science laboratories, working spaces, studios, a library and a student centre.
One of the selling points of the Open University is its flexible, remote style of teaching.
Nearly three quarters of its 200,000 students also have full or part time jobs.
It is the UK's largest university, and has been based at Walton Hall in suburban Milton Keynes since opening in 1969.
