The City of Greater Bendigo has recommended councillors agree to the sale of the Lyttleton Terrace land, on which its former offices stand, when they meet next week.

In a statement, the city said Victoria's Valuer-General set the value for 189-229 Lyttleton Terrace at $5.5 million, excluding GST.

The land would be sold to Development Victoria, which is building the GovHub on the state government's behalf.

The council will next week consider entering into an agreement with the Department of Treasury and Finance to become a tenant in the 1000-desk building, which is the city's recommended course of action.

The city proposes to use proceeds from the sale of the land towards fitting out the city's offices in the GovHub.

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Council's in-principle decision in February 2019 cleared the path for progress to this point.

The city described the report before councillors as "the final step required to implement council's in-principle decision".

Council set a limit to what it would be willing to cover in rental and fitout costs as part of its in-principle decision.

"These costs have been achieved," today's statement from the city said.

The project is expected to cost the city $35.6 million over 40 years.

"As the initial lease term will be 20 years, a 20-year total project cost has also been calculated and is projected to be $24.47 million in today's dollars," the statement said.

"Whilst long-term rental costs would be greater than council is currently paying in today's dollars, it is expected that a portion of this increase will be offset by the operating costs of a more sustainable building, productivity gains through centralising offices, changes to work practices and technology improvements."

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The city said developers of the Bendigo GovHub believed it would be the most sustainable government building in Australia.

"The desire to achieve a high quality, sustainable outcome for the project extends also to the proposed demolition and works on the Lyttleton Terrace site, which will impose conditions on the developer to ensure at least 90 per cent of waste generated from demolition is diverted from landfill," the statement said.

Bendigo's GovHub is proposed to house 400 City of Greater Bendigo staff and 600 state government workers.

Expected benefits include the creation of 100 new public sector jobs and 90 construction jobs, as well as enhancing the customer service experience, delivering a boost to the local economy, and increasing the vibrancy of the Bendigo city centre.

The city's former Lyttleton Terrace offices have been vacant since about March.

Staff moved from the customer service centre to the city's Hopetoun Mill offices late last year.

Two hundred more workers moved to temporary offices in Fountain Court between January and March.

"This sale process has been undertaken in accordance with the Local Government Act (1989) and Local Government Act (2020) that allow for the direct sale of land between governments," today's statement from the city said.

City corporate performance director Andrew Cooney said the land was valued last month, following a valuation process over a number of months.

"The Victorian Valuer-General valuation aligns with the independent valuations received by the city," Mr Cooney said.