Historic Tramway Terrace could escape demolition.
It was announced last week that emergency demolition of the registered building had been recommended as it was deemed unsafe.
The Department of Infrastructure advertised for a firm to carry out the work straightaway.
But heritage campaigners raised concerns that the department was seeking to bypass planning rules.
And now the department has issued a statement, saying it is not necessarily the case that the building will be flattened.
A spokesman said: ‘The DoI is aware that an announcement about properties on Tramway Terrace in Douglas, which are currently unsafe to use, had stated that they will be demolished.
‘This is not necessarily the case and DoI are committed to ensure they follow appropriate procedure in regards to registered buildings.’
He said as part of that process the Department of Environment, Food and Agriculture has instructed a conservation-accredited registered engineer to carry out an independent structural review of the properties this week.
‘The structural review will be used by the parties to consider appropriate actions,’ he added.
‘This will ensure all processes are followed correctly, while dealing with the immediate risks to health and safety in an appropriate way.’
Registered building consent is usually required before a protected building can be any demolished or altered.
Last year, an application to demolish and redevelop the Newson’s building on North Quay were thrown out by the planning committee. The applicants said the building was in imminent risk of collapse but the government structural engineer who advised the committee said the warehouse was ‘capable of being repurposed’.
Isle of Man Victorian Society member Peter Kelly had claimed that when it came to Tramway Terrace, ‘one department is letting the other go ahead and do what it likes, which is quite wrong’.
The historic stable block to the rear of Tramway Terrace is unaffected - although planning consultant Patricia Newton has warned the stables could be left open to the elements if demolition does go ahead.
Services on the horse tramway were reduced for the remainder of the season to ensure the safety of horses and staff.