The historic Royal Star and Garter home could be converted into a luxury hotel or student accommodation when it is sold, a history society chairman has said.

The Grade II listed landmark, which houses disabled ex-servicemen and women, is due to go on the market after the charity announced it would move its 60 residents to Surbiton in 2013.

The move will mark the end of an era for the charity, which has been in Richmond Hill since 1916, and has raised questions about the future of the historic building.

Richmond Council emphasised the importance of strict conditions to preserve its character and heritage, but said it would support a range of uses including a hotel, housing, a school or leisure facilities.

David Blomfield, chairman of the Richmond Local History Society, said: “The irony of its history is that it was originally a hotel, and then used in the First World War for the troops there. My mother was a nurse there.

“I think it would be welcomed by the local history society and many residents of Richmond if the building is maintained and either found a role again as a hotel, which of course is its historic role, or if it is found another valuable purpose.”

He said the building, which would have to compete with neighbouring Petersham Hotel and Richmond Hill Hotel, could be “wonderful” accommodation for students at the nearby American International University, in Queen's Road. The university declined to comment on whether it was looking into this.

Dr Blomfield said: “The American university, within 100 yards on the top of the hill, might find it appropriate for accommodation at what is a growing university and in need of accommodation that’s often found elsewhere and often inconvenient.

“If it is economically possible that would seem a very appropriate use.”

The council, in a 2008 planning brief, said the building could accommodate “community or commercial uses” such as a conference centre, offices, a gym, spa, cafe or restaurant.

It will expect the chapel to remain as a memorial to the Royal Star and Garter charity. Groups such as English Heritage and the Twentieth Century Society, along with the authority’s conservation team, will also be consulted.

A spokeswoman for the Royal Star and Garter charity said: “We would like to think that we have been a good neighbour for the past 100 years, and we hope that whoever follows is an equally good fit.”