A shipyard soon could highlight the mouth of the Quinnipiac River.

In August, the New Haven Development Commission approved the acquisition of seven properties along River Street to begin the $20 million redevelopment process of the 42-acre zone. New Haven economic development officials hope to launch an industrial park, possibly centered on a shipbuilding firm.

“It would be nice to make use of the deep water in that area,” said Helen Rosenberg, a New Haven business services officer. “A shipyard is a great possibility.”

The latest proposal from the city will transform the blighted tract into a blend of light industrial, commercial and residential complexes separated from the Quinnipiac River by a strip of open space. The project could take up to three years.

A junkyard belonging to Lloyd Terminals Inc. and an inactive Hess oil distillation plant currently occupy large sections of the River Street tract. The development committee approved the acquisition of both sites.

Other occupants include a Meyers Distributors warehouse that is 80 percent vacant, an inactive DuPont chemical distribution center and the Regan Metals scrap yard.

With the commission’s recent approval, the city’s economic development office may now offer to purchase property. The commission works out of the economic development office, city officials said.

The city has been planning to redevelop the southern half of Fair Haven since the 1980s. A colored map in Rosenberg’s office dating from 1988 displays proposed industrial uses similar to those in the port district that lies across the river. But the latest plans are different.

“Some people would like to see the port district expand over toward River Street, but that’s not going to happen,” Rosenberg said. “There’s only so much room for those types of things.”

New Haven’s economic development administrator, Henry Fernandez, could not be reached for comment.

The River Street Historic District was added to the National Register of Historic Places in 1989 and encompasses 23 buildings over the 85 acres roughly bound by Chapel Street, Blatchley Avenue, James Street and the water. The River Street parcel falls within the historic district.

The city’s plan would restore some of the historic red brick factories and fit most new buildings into the architectural mold. Blighted properties would be removed.

The entire project is expected to cost $20 million. The state Department of Economic and Community Development is currently considering a city application for $8 million in aid. The city’s Community Development Committee also approved $10 million of municipal bonds for the project in early January. Contributions from private developers and various smaller grants should cover the rest of the cost.

City funds are earmarked for land acquisition, while state funds would pay for infrastructure improvements, such as sidewalks and electrical wires. City engineers began designing a new sewage system for the site in April.

In January, the Board of Aldermen approved the state’s designation of the 42 acres as part of a municipal development plan, allowing the city to acquire properties via eminent domain and apply for state financial assistance.