The Princes Parade scheme is due to progress once market conditions are more favourable.
Cabinet members considered options relating to the site in Hythe earlier today (14 December) after spending on the project was paused last month.
It was agreed all outstanding pre-commencement planning conditions will be satisfied and some material works carried out to ensure the permission is implemented.
This would allow the land to be ready for construction and for the tendering process for the main contracts to start once the economy has settled.
Leader Cllr David Monk said: "Building a leisure centre in 2022 has been made a lot more expensive by the uncertain economic conditions, exceptionally high inflationary pressures and rising energy costs caused by the war in Ukraine.
"These factors are not exclusive to the Princes Parade project. But what this decision does is reduce the immediate financial risks to the council while retaining the development value and community benefits of the project."
The footpath south of The Sea View Bridge in Seabrook will remain open until works necessitate its closure. Hoardings on the boundary of the site will remain in place to keep the site secure.
As per the agreed remediation plans, air monitoring will be undertaken when any works necessitate excavation of the site.