The package would see the venue reopen permanently for university and community use. The collapse of the company that ran the Byre in February 2013 shocked the Scottish art world and more than 7,000 people signed a petition to save the theatre.
Under the proposed arrangement the theatre would be used by the university during the day as a teaching space, while at evenings and weekends it would become an arts centre for students and community-led music and drama. Professional touring companies would also be encourage to visit the Byre, while art films, mini film festivals and live broadcasts from the National Theatre and Royal Opera would form part of the theatre's public programme.
The university claims in its formal proposal to Fife Council that the package would benefit students, staff, local amateur dramatic groups and the wider population of St Andrews and Fife, in line with the vision of the theatre's founder Alexander Paterson. The theatre would also become the permanent base for St Andrews Opera.
Professor Malcolm MacLeod, St Andrews Vice-Principal for Enterprise and Engagement, said: "As one of the world's top 50 Arts and Humanities Universities, we have a vested interest in how the Arts are valued in Scotland. It is part of our core mission to nurture and promote a wider appreciation and understanding of the Arts. That is why we want to ensure the future of the Byre Theatre, and to re-open it up for educational and creative use.
"The Byre's demise and subsequent long-term closure have been sorely felt in St Andrews and further afield, not just because the town lost a very important and much loved theatre, but because people lost their jobs and their livelihoods.
"With the support of Fife Council officials, we have given this proposal considerable thought and believe that our plans offer the Byre a fresh start, new life and a sustainable future founded on mixed use, at no cost to the local authority in Fife."
The full bid will be published on Fife Direct and is expected to be considered by Fife Councillors on April 15, alongside other bids to run the theatre.