In April New York University announced plans to demolish the 170-seat theatre, which is not landmarked, but has a storied history. It was once home to the Provincetown Players, which showcased the early works of Eugene O'Neill. It has also featured the early works of Edward Albee and Edna St. Vincent Millay, among others.

NYU's plans to demolish a block of buildings on MacDougal Street, including the famed theatre, brought down a storm of protest from preservationists, historians and theatre celebrities. A new five-story building with a theatre, which would be utilized by NYU's law school, was proposed to take its place.

Playbill.com has learned that the University has decided to back off that plan and preserve the theatre. A new building at 133-139 MacDougal Street would be constructed around the existing theatre.

This move may not mean the end of the fight over the building. Greenwich Village Society for Historic Preservation, for one, considers the entire structure worth saving.

NYU's project will be discussed May 28 during a meeting of Community Board 2's Institutions Committee.