A spokeswoman for the government said the school was being transferred to the Department of Treasury and would be offered for sale because the Meander Valley Council had declined an offer to take ownership of the site.

"The usual due diligence process will then be undertaken to prepare the property for sale, and as soon as practical the property will be listed for sale on the open market," she said.

Meander Valley mayor Craig Perkins said the council had written to the Education Department in May with alternative requests in relation to taking over the site, which were refused.

The council had requested a more collaborative approach with the department and Education Minister Jeremy Rockliff to find a use for the site.

The council asked the government to waive stamp duty, remove the reversionary covenant requirement and provide building reports.

"I don't think what we put in our request was unreasonable, particularly around if we're going to take on a building we asked for a building report and understanding of what the conditions of the buildings were so we understand the liability we might be taking on," Cr Perkins said.

Mr Rockliff wrote to the Meander Valley Council in June, stating that because the buildings had been offered to the council at "peppercorn value", the reversionary covenant and payment of stamp duty by the purchaser were key requirements.

The letter stated it was "standard practice" that building condition reports were obtained by the buyer of a property.

The government spokeswoman said the Department of Education had worked extensively with the council regarding the future of the former Meander Valley Primary School.

"The council was given the opportunity to have the land and buildings at peppercorn value," she said.

"It is disappointing that this very reasonable offer was rejected by council.

"A fair and reasonable approach must be undertaken by all when negotiating the sale of an asset owned by Tasmanian taxpayers."

The government has also confirmed the sale of the former Rocherlea Primary School site to a private buyer in April for $430,000.