The park is zoned as a recreational area but the council plans to rezone it for residential use and estimates up to 80 medium-sized residential sections could be created.
Under city council requirements the new buyer must retain some of the land for a public reserve.
"It's good news for the city as it will be open to the public," Mayor Julie Hardaker says.
Hamilton Rugby Union chairman Peter Way said the board had received eight strong tenders but had agreed upon one from a local developer.
Ms Hardaker said for 12 years the city council had made it clear it would not purchase the land and was not in a financial position to do so.
Details have emerged about the future of Stan Heather Park that fetched upward of $2 million in June last year.
The lot was sold to local firm CKC Holdings, the company of developer duo and brothers Craig and Keith Clapson.
The company is in the process of receiving land use consent from Hamilton City Council and it has been revealed that CKC Holdings is planning to build 92 dwellings on the site.
Bayleys property agent Stephen Shale said this will give the development's residents peace of mind around the consistent standard of quality housing in the area.
The first stage of housing sales is set to open in November.
Mr Shale said construction on the dwellings would start as soon as pen was put to paper.
The house and land sizes would vary but the developers are targeting buyers looking at the middle of the market.
That would put house prices roughly in the $400,000-$500,000 price range.
Part of the deal brokered was that CKC Holdings would allow HRU to continue using the fields at the park until the rugby season ends at the beginning of August.
