City Hall decided Thursday that 18 out of 30 houses will be spared from demolition at the Mahakan Fort community after final negotiations with residents.
However, the decision has displeased the residents despite a compromise being proposed to allow them to remain in the community after the site becomes a "living museum".
The 18 houses will be the centrepieces of the museum.
The resolution to keep 18 houses came following a tripartite negotiation Thursday, chaired by Yutthapan Meechai, secretary to Bangkok governor, which was attended by representatives from City Hall, the army and residents who are backed by architectural and city planning academics.
Of the 18 houses, two are wooden houses built before the reign of King Rama V, 13 are wooden houses built between the reigns of King Rama V and King Rama VII and three are built in a more modern style with concrete and wood, between the reigns of King Rama VIII and King Rama IX.
Meanwhile, Pornthep Buranabureedet, deputy president of the Mahakan Fort community, said the residents were not satisfied with the decision as City Hall has never discussed whether they will be able to continue living in the community.
"We are not happy with the decision because we want a design which can preserve all of the houses in the community and allow us to continue to live here," he said.
A gesture of compromise by Yuthapan Meechai, secretary to Bangkok governor who attended the meeting as chief negotiator on the tripartite committee solving the Mahakan conflict, failed to lift the community's spirit.
Mr Yuthapan said he has offered to remove an initial condition for negotiation, that prohibits the community from staying when the site turns into a living museum.
It was the first time he has shown such openness to a call by the community, academics and conservationists that the city keep not only the wooden houses but also the community.
However, some experts question some of the wording in the talks. Paranee Sawasdirak, a town planning expert, welcomed Mr Yuthachai's gesture though the term "stay" still remains unclear. He said more discussion is needed to clarify the issue.