A planning scheme amendment for 42 Vickers Street means the site is now classed as a general residential zone.

According to documents published on the state government's planning website, the land had been identified as surplus to requirements.

The site was previously categorised as Public Use Zone 1 - Service and Utility - but was no longer being used.

Under Victorian planning guidelines, government agencies that no longer require land for a public purpose are obliged to declare it and allow for its sale.

The planning documents said the land's rezoning for residential use "would result in a good planning outcome... due to the existing residential nature of the surrounding area."

"The amendment will have positive social effects by allowing an underutilised site to contribute to the future infill housing needs."

Planners also said there was "an appropriate buffer distance" to the Ballarat South Waste Water Treatment Plant, which lies to the south-east of the site.

"A preliminary site investigation concludes that there is no evidence of contamination at the site," the planning documents say. The application for the amendment was made to the state's minister of planning by Cardno TGM on behalf of Central Highlands Water.

The site is a long, rectangular shape and a short distance from Yuilles Wetlands along the Yarrowee River. It is currently vacant and no other government agencies expressed interest in using the site. Details of the exact size of the land were not immediately clear from the amendment.

It is about 500 metres from Albert Street, the main north-south thoroughfare through Sebastopol.

The amendment to the planning scheme, known as C226BALL, was published earlier this month.

One response was received after CardnoTGM wrote to nearby residents and landlowners seeking their views on the proposal.

That submission raised issues about access to public open space, but these were dismissed as "not applicable" as public access had never been available.

Central Highlands Water was approached for comment.

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