Kaul was the maternal aunt of late Prime Minister Indira Gandhi and wife of famous botanist Professor Kailash Nath Kaul.
The bungalow, located on Gokhale Marg, has been locked up for years and was now being spruced up for Priyanka Gandhi's residence. It is flanked by a government colony and has a few high rise buildings in the neighborhood.
With her finding a home in Lucknow, it is clear that the Congress General Secretary will be spending more time in the the Uttar Pradesh state capital in the coming months.
Party sources said that Priyanka Gandhi has planned to spend at least a week in Lucknow every month and travel around the state with her base in the state capital.
During her last visit to Lucknow on October 2 to participate in a 'padyatra', Priyanka Gandhi had visited the house and spent some time there.
The house is yet to be given clearance by the SPG which will ascertain if it meets all security requirements. Sources said that the height of the boundary wall would have to be increased to meet security norms.
Sources close to Priyanka Gandhi said that they had also zeroed in on a house in the posh Gomti Nagar locality but it did not meet security requirements.
When she was appointed Congress General Secretary in charge of Eastern Uttar Pradesh earlier this year, former party president Rahul Gandhi had said his sister was given the responsibility as part of a long-term planning.
Priyanka Gandhi has been active on the Twitter expressing her views on major developments in the state.
The Kaul home is now expected to emerge as a centre of political activities in the Congress.
( With inputs from IANS )