The future of a Banksy that appeared in a south Wales steel town is more certain after the local authority announced that an agreement had been reached to house it in a former police station a mile from where it appeared.

The artwork, Season’s Greetings, has attracted thousands of Banksy fans to a formerly nondescript garage in Port Talbot since it was created just before Christmas last year.

There was concern the work could be sold and taken from the area until an Essex art dealer, John Brandler, bought it from the garage owner and said he would loan it to the town for at least three years.

On Tuesday, Neath Port Talbot council announced it had reached an agreement with the housing organisation that owns the former police station site, Ty’r Orsaf, in the town centre.

A council spokesperson said: “We are pleased to announce that Neath Port Talbot council and Pobl Housing have agreed terms to let one of the commercial units at Ty’r Orsaf be used to keep the Banksy on public display.

“This will commence when the artwork is moved from its present location at the end of May.”

Brandler has been frustrated that ambitious plans to bring other works of art by the likes of Damien Hirst to Port Talbot to create a larger gallery around the Banksy seem to be floundering.

He said he had given the council and the Welsh government until the end of April to provide him with terms and conditions for the gallery but had received nothing.

The council spokesperson said: “The opportunity of longer-term occupation of the units will remain, should a scheme for a larger contemporary art gallery provision at the same premises come to fruition.

“The council leader [Rob Jones] is awaiting a response to his request for a meeting with the Welsh government to discuss the future of the gallery proposal.”