The city said that it was now ready to proceed with social housing at the site, but first needed to conduct a survey of those occupying the building.
Ndifuna Ukwazi, through its Reclaim the City campaign, took over the building in 2017 after it was left vacant in a move to secure decent and affordable housing for poor and working-class people.
The City of Cape Town said that it wanted to develop the hospital, calling on occupants to vacate otherwise it would pursue eviction proceedings.
Last week, the Cape Town mayoral committee granted an in-principle approval and the matter was on the agenda at a Cape Town council meeting on Thursday.
The Western Cape High Court handed down judgment on Monday as it set aside the sale of the Tafelberg property in Sea Point to a private buyer.
Activists have been at loggerheads with the city over the golf course for several months.
The hospital has been occupied by homeless and evicted residents since 2017, who dubbed it Cissie Gool House.
Organisations said the city could have used the piece of land to build affordable housing units for Capetonians.
Reclaim the City's Bevil Lucas wants to know why many Green Point residents are against low-cost housing developments in the area.
The group protested at the Rondebosch Golf Course in Cape Town on Thursday, demanding that the golf course be used for housing.
Reclaim the City says if councillors vote to dispose of the land this will unlock other public pieces of land that lies underutilised and vacant.
On Tuesday, demonstrators symbolically erected shacks on a vacant piece of land in the Foreshore that the city sold to developer Growthpoint Properties for more than R86 million in 2016.
Nkosikhona Swartbooi, head of Ndifuna Ukwazi, says he still believes the government is not prioritising affordable housing in the inner city.
Bonginkosi Madikizela held a media briefing following comments made by former councillor Brett Herron regarding social housing in Cape Town.
The building has been occupied since last year by Reclaim The City, which also behind the occupation of the Helen Bowden Nurses Home near the V&A Waterfront.
Popular Cape Town activist Zamuxolo Dolophini known as “Rasta" was stabbed to death outside the Helen Bowden Nurses Home in Greenpoint last Sunday night.
Scores of former District Six residents joined hundreds of other demonstrators in a march for land, housing and school safety held in Cape Town on Wednesday.
Popular Cape Town activist Zamuxolo Dolophini was stabbed to death outside the Helen Bowden Nurses Home in Greenpoint on Sunday night.
