Point Cook Air Force Base, cradle of the Royal Australian Air Force, will be sold as an operating airport by the end of June next year.
Just 86 of the 344 hectares now covered by the base will remain in Federal Government ownership, enabling the RAAF to retain its museum and a heritage precinct.
Last week The Age reported the base was among four sites in Victoria and 19 around the nation on an annual list of endangered places published by the Australian Council of National Trusts.
The parliamentary secretary for defence, Fran Bailey, yesterday said the Government had approved selling the base, south-west of Melbourne near Werribee, in 2003-04.
Wyndham City Council could not provide a spokesman yesterday to comment on the sale.
The army established the base for the Australian Flying Corps in 1913. The RAAF was formed in 1921.
The sale of Point Cook has been mooted for several years as the Defence Department has needed to liquidate assets to meet operational costs and the base has been progressively decommissioned.
The heritage precinct is expected to include the parade ground, sergeants' mess and accommodation, the Australian Flying Corps memorial and Australian Air Force Cadets headquarters.
But National Trust of Australia (Victoria) conservation manager Jim Gard'ner last night expressed concern that the oldest part of the base might have been overlooked for heritage protection. "We are concerned the southern tarmac area would appear to be proposed for sale," Mr Gard'ner said.
This area includes a row of seaplane hangars, built for the RAAF's squadron of Southampton flying boats in the 1930s. More recently, they have been used as a training school for RAAF firefighters and as film studios.
A spokesman for Ms Bailey said anything of worth not covered by the heritage precinct would be protected by state laws.
A spokesman for Planning Minister Mary Delahunty said the State Government was glad that Point Cook would remain a working airfield, although it had not yet seen details of the sale plan.