The council called for tenders for the sale of the 17-unit complex in January and finalised the sale to Clare River Ltd on June 2.
The five tenders were from local buyers and outside North Otago.
Proceeds from the sale will be reinvested by the council into new community housing.
Preliminary planning has started on a new complex in Oamaru.
The Clare St units, now 45 years old, had a current rateable value of $700,000, and were part of 108 units of community housing owned by the council in Oamaru, Hampden and Palmerston.
Situated on 2089sq m of land, there are 11 bedsits and six single-bedroom units built of Oamaru stone in 1965, the first community housing built by the former Oamaru Borough Council.
At the time of the sale, 16 units were tenanted - four of the tenants meet the criteria for housing for the elderly, of being over 60 years and on limited incomes or benefits.
The rest of the tenants were of varying ages.
For the past six years, the complex has been managed by the Meadowbank Bowling Club under contract to the council.
The decision to sell the Clare St complex followed a community housing review in 2006 and other reviews since then.
Part of this had been reviewing the internal layout and design of all of the units council owned.
As a result, the council decided to progressively renew the present community housing stock either by refurbishing it or selling to provide funds for new units that met modern requirements and building codes.
The council has committed itself to spending $3.6 million in 2011-12 to upgrade 30 community housing units, using a mixture of a loan and Government subsidy.
