Sources expect the site, opposite Batman Park, will make way for a high density village of shops, offices and apartments.
Any redevelopment would offer unique easterly views up the Yarra River and to Federation Square.
The landmark asset is expected to net the government about $30 million as a development site.
A government representative was unavailable for comment when contacted by Capital Gain.
Last week, it was reported another prominent government owned site – the VicRoads office in Denmark Street, Kew – is also earmarked for sale.
In March, the government also listed for sale another prominent Yarra River fronting site, between the Seafarers Mission and Wurundjeri Way.
Like Kew, the former Convention Centre, in the World Trade Centre precinct, is expected to be redeveloped into a village of shops, offices and apartments.