The council had been considering taking legal action against Apple Hill care home, in Henley Road in Hurley, after obtaining evidence in December that it was in breach of its planning consent by housing patients who were over 65.
Owner Henley Healthcare Ltd was given time to prepare an application to change the use of the home, and new plans have now been received.
A previous application, submitted in May, was declared invalid.
A briefing note from the Royal Borough has confirmed any plans for enforcement action against the home have been put on hold until the outcome of the planning application is decided.
Comments on the application should be made in writing to the case officer by Friday, July 12.
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