The former Ovens Benevolent Asylum in Beechworth is for sale as a development site.
The state government can expect about $2 million from any deal.
The 6.5 hectare site contains five heritage protected buildings and a tract of land which has been subdivided.
Construction of the first hospital started in 1862 .
The complex was added to from 1867, the Heritage Council of Victoria said.
The property has also been known as Ovens and Murray Home and Beechworth Hospital.
LJ Hooker selling agent Dean Lupson expects interest from developers which may consider an aged care facility or boutique tourist accommodation investment.
Alternatively, the agent added, a school could be a development outcome – La Trobe operates from a former hospital in the area.
The former Beechworth Jail is being redeveloped as a tourist attraction after being sold about five years ago.