The 0.0439ha section containing a shed has a capital value of $129,00 and was purchased by the council in September.
Council botanic garden and cemeteries team leader Alan Matchett said planning work was still to be done, changing the designation of the land from residential to reserve.
Further discussions would be needed with neighbours and the Otago Peninsula Community Board about future plans.
In the meantime, work may be done including improving the entrance to the cemetery to include some off-street parking. But this would depend on funding.
It could be several years before the land was fully incorporated into the cemetery.
It was hoped the purchase would extend the use of the cemetery, established at the end of Virginia Ave in 1868, for about another 20 years.
The existing cemetery contains 286 burials - this figure includes both ashes and casket burials.
There is still room in the cemetery for burials, but the council does not allow people to book plots in advance, because it could get into the situation where it could sell all the plots and have nowhere to bury people who might die in the meantime.
The land had been owned by Broad Bay arborist Pete Ritchie and his late wife, author Dianne Pettis.
Mr Ritchie said he had considered building a house there, but later offered the land to the council because he felt it was a more appropriate use of the land than having another house towering over the cemetery.
Mr Matchett said it was unusual to find opportunities to buy suitable extra land next to existing cemeteries.
