Developers take gamble on formerly run-down housing estate, with first renovated apartments going on sale in October

For many people in Sheffield over recent decades, Park Hill was the last place you would want to end up living as a social tenant. It thus sounds little short of a miracle that around 1,000 people have expressed an interest in buying a flat in the vast postwar housing estate, a fortnight before the homes even go on sale.

It is, in fact, the first indication that a hugely ambitious £100m gamble on the rehabilitation of that most disparaged of architectural styles, postwar brutalism, might pay off. For more than 50 years Park Hill has been one of Sheffield's most famous – or, depending on your view, notorious – landmarks, looming vast and grey on a hill overlooking the city centre. It was designed in the late 1950s by Ivor Smith and Jack Lynn, a pair of idealistic young modernists, and replaced a badly bombed slum area.

While sticking to a tight budget, their blueprint incorporated a series of innovative ideas, including blocks which tapered down from 14 to four storeys as the site rose, giving a continuously level roofline, and a famous network of interlinked "streets in the sky" – ascending walkways wide enough for milk floats.

Park Hill was initially popular but its fortunes declined due both to design – the streets in the sky proved an ideal escape route for criminals – and poor maintenance, as well as the gradual replacement of original residents by short-term tenants and problem families.

By the 1980s Park Hill had a reputation, not completely deserved, as a decrepit no-go area. Probably the only thing which saved it was English Heritage's decision in 1998 to grant the estate a heavily protected Grade II* listing.

This in turn left Sheffield city council with a headache: not only was it forbidden from demolishing Park Hill, the listing meant scope for renovation was severely limited.

Eventually the council signed a deal with Urban Splash, a developer which made its name turning central Manchester's long-neglected Victorian warehouses into desirable homes.

After a tortuous and financially precarious seven-year project, on 8 October the first 52 apartments of an eventual 874 will go on sale, with another 26 available via a housing association. The developers also want cafes, shops and other businesses to occupy commercial units.

In a deliberate statement of intent, the first renovated block is that directly facing the city. While only a handful of show flats are completed, the exterior already presents an utterly transformed face – the crumbling concrete frame cleaned and repaired, window spaces expanded and grubby brick facings replaced by anodised metal panels in a cascade of vibrant colours.

Urban Splash says it has been "delighted" with the response, with about 1,000 people signing up for information ahead of the first sales, and strong interest from businesses.

If Park Hill is successfully reborn – far from a certainty for a project which has already required one public bailout – it will complete a 50-year full circle for the estate and indicate a possible wider shift in public opinion towards such postwar schemes.

While a handful have been adopted by private buyers, notably Trellick Tower in North Kensington and Keeling House in Bethnal Green, these are smaller in scale and, crucially, in fashionable parts of London.

Tom Bloxham, who runs Urban Splash, said he believed tastes have changed: "There was a time when they used to demolish lovely Victorian mansions just because they had a bit of damp and the windows were rotten. That seems crazy now, and it would have been crazy to demolish Park Hill. Park Hill is a quality building, and not just from a point of view of subjective taste.

"All the flats are duplex, they're all dual-facing, they're all full of glazing, they all have south-facing living rooms. It's a very, very clever piece of design and it will be a great place to live."

Some critics say the scale of redevelopment, which saw the block stripped back to its bare concrete frame, has been too significant.

"The project seemed to start with the premise that they had to fundamentally change Park Hill if people were going to love it and move back, rather than saying, 'This is incredibly interesting and a really good bit of design, and the problem with it is that it's been poorly maintained and run down,' " said Catherine Croft, director of the 20th Century Society.

"The cumulative total of all the decisions that have been made means there's not a lot of the historic building left."

The architects and developers, however, argue that such was Park Hill's reputation – its ubiquitous visibility from the city centre meant the crumbling facade became a shorthand for Sheffield's wider decline – a significant and visible makeover was vital.

But the estate's long and mixed history is celebrated in places, most visibly the retention of a famous piece of graffiti on a high concrete walkway, "I love you will u marry me", now etched in neon and illuminated at night.

The hope is that Park Hill will become simultaneously more accessible – new landscaping and the planned shops and cafes are intended so locals walk through the estate rather than around it – and more secure, with the "streets in the sky" sealed off by gates and concierges.

Bloxham sees a parallel with the origins of his company: "When we first started putting loft apartments in Manchester 20 years ago, people said we were stupid. 'Why would you want to live there?' they said. 'You can't even buy a loaf of bread.' Will it work this time? We'll find out soon."

How a 'palace' lost its lustre

Edith Bradbury and her husband, Ron, have lived at Park Hill long enough to experience its entire history of hope, decline and subsequent resurrection from a ringside sofa. They arrived in 1959, two years before the estate was finished, having come from a single room in a slum area.

"When we got here it felt like a palace," said Edith, 78. "In our old place we only had a Baby Belling cooker. You had to cook your chips on the fire."

At first, the estate functioned as well as the architects could have dreamed: "It was a lovely atmosphere and there was such a sense of community. The bingo was on at 7.30pm and you'd have to start queuing at 5.30pm to get in.

"There were two butchers, a Co-op, a dentist, sweet shop, chemist, even a bike shop. You were only a few minutes from town but you never had to go in."

Then came the gradual decline, as the shops and on-site pubs closed, long-term neighbours left and drug use escalated. Now, the couple are finally leaving, but only to move into a nearby retirement complex. "We'd stay forever but the stairs are getting tricky," said Ron.