Council has agreed to investigate and obtains quotations for an environmental audit and/or remediation plan for the former VicRoads site, for the purposes of developing the site as a residential area.

Shire chief executive officer, Justine Linley, said this followed discussions with senior officers at VicRoads regarding options for the use and development of the vacant land.

Ms Linley said an option had been put forward for council to consider, on the basis that council would not be 'out of pocket' in any form and that VicRoads similarly is able to comply with the sale price set by the Valuer General's office.

"Council does not currently have a direct role or say in the development of the site, however, it could choose to be more directly involved in the facilitation of the clean-up, sale and development of the land resulting in a more productive use of the area," Ms Linley said.

"To ensure council is not out of pocket it would be important to establish that there is indeed a third party or developer willing to enter into an enforceable agreement to purchase the land from council and develop it before council agrees to further investigation or clean-up of the site."

Cr Jason Hosemans said he agreed with the potential for the development of the site.

"There is an opportunity here to open up the site for potential development," he said.

"It will be low cost and we are only seeking quotations at this stage. There is no harm in us determining if it is possible to undertake further development of this site."

Cr Karen Hyslop spoke against the motion, believing any site study would be a waste of ratepayer money.

"I think we need to weigh up all the costs against the risks," Cr Hyslop said.

"An environmental audit will be costly and will mean we are taking on an extra burden. I wonder if we should be doing that.

"We already have the Sloane Street development and I think we should be giving that top priority, not taking on new developments."

Mayor Cr Kevin Erwin said he supported the motion, particularly as it was only an investigation at this stage.