The plans also include the demolition of buildings attached to the mill in Pinsley Road and replacing them with a three-storey block of six apartments.
The site is within the conservation area and Herefordshire Council's chief conservation officer recommended approval subject to conditions on architectural details and repairs to external brickwork.
Herefordshire Council's public rights of way manager said certain provisos would be need to be included in the proposed scheme if planning permission is to be granted.
Leominster Town Council objected feeling the plan was overdevelopment.
One letter of objection was received from Leominster Civic Society concerned the scheme was too ambitious and constituted over-development.
Two further letters of representation welcomed the residential use of the site but felt landscaping was needed. They also expressed concern at the likely increase in traffic.
The site is identified in the Herefordshire Unitary Development Plan as being within an established residential area.