A decision not to move the southern interisland ferry terminal from Picton to Clifford Bay has resulted in more than 400ha of KiwiRail land being sold to a local wine grower.

KiwiRail today confirmed that the sale of the land at Clifford Bay, owned by its subsidiary Clifford Bay Limited, to local wine grower Peter Yealands, had been finalised.

The 413ha site was placed on the market earlier this year.

KiwiRail's Property, Investment and Revenue national manager Andrew Robinson said the sale price was a private matter between the parties involved.

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"KiwiRail has a duty as a state owned enterprise to operate commercially, and make a return on investment, and this sale fulfills those requirements."

The property was purchased in 1993 by Clifford Bay Limited.

"The Government's decision last year not to proceed with the development of a new terminal means that the land is surplus to our requirements and therefore the most sensible option is for it be sold," Mr Robinson said.

Mr Yealands also owned the historic Flaxbourne Station and said he planned to upgrade both properties together.

A ferry terminal was proposed there in the 1920s and in 1997 TranzRail (now KiwiRail) did everything bar build it.

It got the necessary 39 consents, the Marlborough District Council rezoned the area a "port zone", and the transport company bought adjacent land for ferry and rail-associated businesses.

Last November the Government announced moving the ferry terminal to Clifford Bay was not financially viable.