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The Bay of Islands home has been extensively renovated since it was owned by Mr Asia heroin syndicate boss Terry Clark.
Clark started building his dream home using drug money. But in 1979 he was arrested for murder and jailed, dying in prison four years later.
A spokesman for the family selling the house said the mansion was a dump when the family bought it in 1997. Before that, the six-bedroom mansion sat empty for at least 12 years.
"Squatters moved in and they got evicted...They tried to burn the place down."
He said the family had since created a holiday home where a generation of grandchildren had grown up with fond summer memories.
For this reason, the family had mixed feelings about selling, but with the family patriarch passing away last year, it was time to move on.
The house also had a spa, but a swimming pool was unnecessary.
"The whole Bay of Islands is our swimming pool."
Other highlights included a floating jetty big enough to accommodate a 15m boat, a cottage, and pathways wide enough for golf carts criss-crossing the landscaped grounds sprawling over the 2ha section.
A wardrobe inside the house leads to an alleged escape passage under the mansion.
"There's a hatch under a wardrobe, which you can go down and comes out about 10m in front of the house, towards the water, allowing a potential quick escape by boat. We were told the space was for ventilation, but it could have been an escape tunnel for its previous owner, some locals say," said Chester Rendell, Bayleys Auckland Central salesman.
Bayleys said a heliport on the property was believed to have been part of Clark's alternative escape plan by air if needed, reminiscent of 1980s gangster movie Scarface.
The property had a rateable value of $2.35 million but was expected to sell for far more, said Mr Rendell.
He said the mansion would appeal most to families wanting a "magnificent permanent home" or a big holiday home.
"It is rare to find a property of this calibre that combines the facilities, size and sought-after location of this one," Mr Rendell added.
"The property's colourful history is likely to only add to its appeal and the interest of potential buyers."
Terrance John Clark
- Moved from small-time crime and cannabis-dealing to selling cocaine and heroin.
- Murdered or had killed at least six associates - one survivor estimates 12 dead, according to Pat Booth, author of The Mr Asia File.
- The original Mr Asia was Martin "Marty" Johnston, who moved from Auckland to Singapore.
- Clark ordered the murder of Johnston, whose mutilated body was found in a disused Lancashire quarry.
- At its peak in the late 1970s, the syndicate was making tens of millions of dollars annually.
- By John Weekes of the NZME. News Service