It announced on Thursday a 10.69ha block known as Scurr Heights is being put up for tender by real estate firm Bayleys.
The land is on the south side of Aubrey Rd, opposite the new Kirimoko subdivision, and is capable of being subdivided into at least 100 sections. It has a rateable value of $4,800,000.
Deputy mayor Lyal Cocks told the Otago Daily Times the decision to sell was made during the public-excluded parts of recent meetings of the council and the Wanaka Community Board.
Mr Cocks said the council was in the process of obtaining an updated valuation for the land to enable it to assess tenders received from developers.
It was the council's hope, he said, the land would not be sold to someone likely to "just sit on it''.
"We are trying to encourage people that have got land that is zoned to get on and develop it, and here we are sitting on one of the most attractive blocks of land in Wanaka. Basically, it's been there for quite some time.''
Bayleys agent Mat Andrews said the land was being sold as one block.
Under the current zone rules, the land could "yield'' about 100 sections, Mr Andrews said.
However, in the council's proposed district plan, the land comes within a new "medium density residential zone'' and Mr Andrews said that would mean it could yield about 140 sections "once fully developed''.
According to the plan, the medium density zone would enable terrace housing, semi-detached housing and detached townhouses, generally of no more than two storeys, on smaller sections.
"It will also enable more rental accommodation for the growing population of transient workers in the district,'' the plan says.
Mr Cocks said how proceeds from the sale would be spent had yet to be determined.
A council media release said the decision to sell was because of "the desire to transfer the value of this land to other significant community projects or acquisition of other strategic land for the next generation''.
The idea of selling council land to help pay for Wanaka's new swimming pool has been factored into the pool's $11.8million budget.
The budget approved by the council to cover the capital cost of the pool and its operating deficit, was for the council to borrow $9,030,000, impose an $8 a head user charge, and raise $2.77 million from land sales and fundraising.
The Otago Community Trust has granted the project $500,000 and the Central Lakes Trust $1million, leaving $1,270,000, potentially, to be made up from land sales.
Cr Cocks said he expected the community board would recommend some of the proceeds of the Scurr Heights sale go to the pool.
Even with $2.77million of fundraising and land sales, the pool project would add $184.05 per year to the average Wanaka rate - an increase considered by some during the pool debate to be too high.
Figures obtained from the council by the ODT in September showed reducing the rates rise to a suggested $100 per year would increase the fundraising target to $10.77million.
Cr Cocks is heading the fundraising programme for the pool.
Tenders for Scurr Heights close on May 12.
