City of Ballarat councillors decided to sell a block of land at 187A Swinglers Road, long used by the school, to the Department of Education and Training for $150,000 at Wednesday night's council meeting.

The land has two old asphalt tennis courts which the school has been using since entering into a licence agreement with council on a peppercorn lease in 2004.

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Council started negotiations with the Victorian School Building Authority and the Department of Education and Training early last year after council identified it as being underutilised.

Invermay Primary School principal Justin Marshman said the site had never been able to be improved by the school as it was owned by council and is currently in poor condition and potholed.

"It's a bitumen court, just a community court space and we've used it over time for phys ed lessons, etc., but it's never been something that belongs to us," he said.

"At the moment, it's not safe. If you were to come out, you'd see there are potholes everywhere, it hasn't been touched for 40-odd years as far as the surface and we haven't been allowed to spend any money on it because it hasn't been school land or department land.

"Our ultimate aim was to get access to it so that we could invest in it and make it a great space for any kids from the Invermay that come to school here."

Mr Marshman said he hoped to develop the site to be a safe multi-purpose court for students and the community.

"It's perfect for us as a growing school to utilise moving forward and we would like to utilise our fundraising so far to put some fake grass down and make it just a nice, safe year-round playspace," he said.

A department spokesperson said the state government was working towards finalising the acquisition of land.

City of Ballarat Mayor Daniel Moloney said many might have assumed the land already belonged to the government because of its proximity to the school.

"I hope that the department is able to use the land in great ways for all the kids and teachers and the broader Invermay community because that's a community that's going to see a bit of growth in coming years as eventually more people start to move out to the north of our city," he said.

"When we move out to the west, the north is our next growth zone so it's an important school and it's great to see the opportunity is there for them in the future."

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