Goulburn Mulwaree Council has been trying to sell the airport for years citing an inability to finance the investment it needs.

The council has now decided not to extend a two-year lease/sale agreement due to expire in October.

The lessee of the airport, who has already spent $250,000 on a non-refundable down payment on the facility, had requested a 12-month extension on the lease.

Goulburn businessman John Ferrara has until the close of business on Monday to decide whether he will proceed with the $2.25 million purchase.

The agreement signed with council stipulates that Mr Ferrara notify the council one month before the contract's expiry on his intentions to complete the purchase.

While clearly disappointed with the decision by the council, the businessman did not want to comment when contacted for this article.

Goulburn Mulwaree Council general manager Chris Berry said it was the third time the council had attempted to sell the airport since the federal government had offloaded it.

He said the council had always aimed to operate the primarily recreational airport at break-even but did not have the finances to invest in it.

''From our perspective it was always peripheral to our main activities of roads, rates and rubbish, playgrounds, parks and sport fields,'' Mr Berry said.

''As a public-sector organisation in NSW we're limited with the funds we can raise from rates.''

The council had decided that a private interest would be able to make the big investment required in the airport as the major operator and so had tried to sell it.

But Mr Berry said this had proved problematic, with the most recent agreed sale falling through in 2009.

Property developer George Tzovaras had agreed to a price of $2.65 million for the site but pulled out after contracts were exchanged, citing financial troubles.

The current agreement was signed with Mr Ferrara, who was building a hotel at the site, about two years later.

Mr Berry said the council had declined to extend the sales agreement with the lessee because it was not in the community's interest.

He said Mr Ferrara had not indicated either way whether he would continue with the sale, but if he did not the council would again be operating the airport.

The council would then need to make a further decision about whether to put the airport back on the market.

''Certainly the strong view of the council is that if it does come back to council to operate the airport, then we will do whatever we can to make sure that it continues operating,'' Mr Berry said.