A $300-million downtown residential tower development is back on.

Ayerswood is about to apply to the city to build the first in a massive, three-tower development on the site of the former London Mews, at 195 Dundas St., said the planner working with the builder.

“Ayerswood has confidence in where the city is going from a transit standpoint. It can proceed with phase one,” said Greg Priamo, planner with Zelinka Priamo, working with Ayerswood.

Ayerswood, owned by developer Tony Graat, pulled the building application in March and filed a $53-million lawsuit against the city, when the city announced the hub for a proposed $500-million bus rapid transit system was to be at King and Clarence streets.

The hub would have seen large glass-and-steel structures built outside the tower, impeding sidewalk traffic and entrance to a proposed underground parking garage, said Priamo.

The city would have expropriated land to make room at the tight spot, which, Graat argued in his statement of claim, left too little space for the residential project.

But the city revamped the core routes — one of two dedicated BRT lines planned for King Street will now run on Queens Avenue — and shifted the main hub a block east, to King and Wellington streets

“The city has been working with us. We always acknowledged the problem the city has and its impact on this project was considerable. With the revision, we worked it out, thankfully,” said Priamo.

Ayerswood will submit a site plan application to the city for a single, 25-storey tower with 137 units.

That is the first phase in what will be three towers, totalling 700 units, of 35-, 32- and 19-storeys and a four-storey office building on what’s now a parking lot at King and Clarence streets.

City officials and politicians, Tuesday, declined comment on whether Ayerswood and Graat has dropped the lawsuit with the city.

It is possible he could apply to build with the city and still seek legal action, as the project has been delayed by the rapid transit plan.