At Thursday's full Queenstown Lakes District Council meeting in the resort the council unanimously voted to proceed with the recommendation, which ultimately means 7.7ha, or about three-quarters, of the prime land will remain in community ownership.
Of the remaining 4.4ha of commercial land on the site, 3.4ha - 2.7ha under freehold interest and 0.7ha under prepaid leasehold interest - will be made available for development in partnership with the private sector.
Mayor Jim Boult said the land had been an issue ``long under consideration by the council''.
``It has been on the table at council meetings for 15 years.
``Leaving it like it is for another period of time is not an option.
``We need to move forward ... what we now want to do is get on with it.''
Part of the recommendation was for the council to set aside 5% of the value of the land for an affordable housing contribution - that could be up to $3million.
Cr Alexa Forbes asked for the reasoning behind that level of contribution.
Mr Boult said he felt ``strongly'' Lakeview, for the council's part, was ``not a commercial operation'' and was conscious the land effectively belonged to ratepayers.
At it's meeting in Wanaka last month the council amended its Special Housing Area lead policy to require a 10% contribution towards affordable housing from developers.
At Thursday's meeting Cr Quentin Smith said Lakeview was ``not an SHA''.
Lakeview was up-zoned land on which there was no requirement for a contribution to affordable housing.
``Notwithstanding, we should be contributing to affordable housing,'' he said.
Cr Val Miller sought for the reasoning behind the 5% to be made ``very clear'' in the event of future litigation efforts from developers seeking to challenge the council.
QLDC strategic projects manager Paul Speedy said Lakeview would go out for expressions of interest early next year and the two-step process, which included a shortlist and request for proposals, would be a ``12-month process''.
