The 1.5 hectare Prohasky Street site was put to the market in November by the Department of Education and Early Childhood Development, which used the property to store disused school portables and machinery.
The site runs alongside the West Gate Freeway, near a busy service station and takeaway restaurant..
Prohasky Street, until recently a little-known thoroughfare, is now a major freeway on-ramp, servicing road users from Plummer Street and Williamstown and Todd roads.
The undisclosed buyer of the site has some experience developing industrial property in the area and is expected to lodge a permit application to redevelop the site by the end of the year.
Marketing of a new industrial park could start next year, and coincide with an anticipated upturn in the domestic economy, says Beller Commercial director Fred Nucara, who negotiated the Port Melbourne deal.
"Given the lack of development land sales in Port Melbourne, and the market generally over the last year, a $4million transaction suggests there are some players in the market prepared to back their instincts and enter the market now to reap the rewards in 12 to 18 months when the market is expected to improve," Mr Nucara said.
"City-fringe development sites are always going to generate strong buyer interest, even in this environment, as they have proven to be the best real estate to recover with strong capital gains over time."
A part of the Port Melbourne site has an easement and cannot be redeveloped.
Meanwhile, a three-level office building in South Melbourne has sold to education service provider Partners in Training Australia for $880,000. PTA, which is based in north-east Victoria, will establish a customised training facility at the 90 Moray Street property. DTZ selling agent Joshua Tebb said it was once a ball-bearing factory that was converted to offices about eight years ago.