Outline plans have been submitted for 220 houses to be built adjacent to the proposed new West Suffolk Hospital site.
If permission is granted, the land north of Gypsy Lane will become the second major development in the area.
The plans also seek to create a new vehicular route, which would run between the A143, Horringer Road, and Horsecroft Road.
This would replace Gypsy Lane, which is proposed to close and become a dedicated foot and cycle path instead.
The application details the creation of 495 vehicle parking spaces, 440 cycle spaces and 10.3 hectares of public open space.
Of the 220 dwellings, 154 bedrooms fall within the category of 'market housing', 46 as 'social, affordable or intermediate rent and 20 as 'affordable home ownership'.
While not part of the proposed development, it also aims to facilitate a sustainable east to west transport route along the southern fringe of Bury St Edmunds.
The outline planning application has been made to West Suffolk Council on behalf of family farming partnership John Brown and Sons.
The planning statement added: "John Brown and Sons have realised the huge benefits to the local community and Bury St Edmunds as a whole that releasing land north of Gypsy Lane for development could yield, not least by supporting the delivery of the new West Suffolk Hospital and greatly enhancing its accessibility by both vehicular and sustainable transport."
If approved, the site will become the second major development in the area, joining the new West Suffolk Hospital project.
The proposed hospital site is located to the west of the site suggested for the 220 new dwellings and will involve a new hospital of up to 100,000 sqm and a multi storey car park.
In a comment submitted by the West Suffolk NHS Foundation Trust, they requested that the new application is considered "wholly separately from, and does not impact the progress of, the live hybrid application for the new hospital seeking to deliver critical healthcare provision."
The letter also detailed that the Trust were "not aware" of this application and that the proposed vehicular access route had already been explored and discounted during their previous discussions with West Suffolk Council.
Over 20 neighbour responses objecting to the plans have been attached to the planning application.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here