Tuapeka Community Health Incorporated (TCHI) chairman Mark Hay made a formal request to the council to buy the section during its meeting in Balclutha on Thursday.
The section adjoining the Lawrence Rural Health Centre rest-home and medical centre in Whitehaven St could be used to build up to six units for older people.
The council agreed to sell the $45,000 section for $5000, citing ''community good''.
Sgt Robin Hutton, of Balclutha, appealed to the council for its budget surplus to be used for additional CCTV cameras. In September, a budget of $20,000 was approved by the council for the installation of four additional cameras, bringing the total in Balclutha to 20.
The council agreed to allow one additional camera to be installed from within the $7500 budget surplus, at an estimate of $4400.
