Well-placed industry sources say the university will pay Drapac about $40 million for the 750 Elizabeth Street site, which abuts other buildings owned by the school.
Drapac had earmarked a 12-level, 37,000-square-metre Bates Smart designed office building for the City Ford site, with the University of Melbourne once speculated to be a possible tenant.
However, that plan never got off the ground, with rumours first surfacing last year that the City Ford site was back on the market for sale.
Drapac’s Ashley Wain declined to comment. A University of Melbourne spokeswoman said the university was interested in buying the site, but that no deal had been finalised.
Drapac paid Nissan Australia $17 million for the 7215square metre dealership in October 2003.
Nissan Australia had owned the site for about 15 years previously, and leased it to City Ford.
The site hugs the Haymarket roundabout, a major car and tram intersection connecting Flemington Road, Peel Street and Royal Parade.