TINTERN Schools has submitted an application to Maroondah Council to allow a 33-lot housing development on the school's Ringwood East grounds.
The plan proposes to subdivide 3.2 hectares in the south-east corner of the Tintern Girls Grammar site for 33 single-dwelling lots.
It includes a new road from Gracedale Avenue along the southern and eastern boundaries of the site to link up with Longview Road to the north, and a sustainability living and learning centre.
Deputy principal Peter Buckingham said the development proposal made good sense.
"I've been here three years and I think what the school has recognised is the day that schools can pass on capital fees is over.
"We want to maintain Tintern's standing in the community."
Mr Buckingham said Tintern Farm, a popular program among students, would not be affected, despite the proposal to sell 30 per cent of the area of the school grounds.
"Land sale is something that many other schools have done.
"We've sought to be mindful and respectful to the environment and didn't keep it a secret - we told the school community and neighbours and did a letter drop."
Mr Buckingham said adjoining property owners would have an opportunity to buy additional land.
He said the money raised from land sales would be reinvested into further development and improvement of school buildings and facilities.
Maroondah Council's director of city development, Phil Turner, said the council was assessing the information provided against the requirements of the Maroondah Planning Scheme.
He said councillors would be "fully briefed" before the application was placed on public exhibition for 14 days, providing the community with an opportunity to comment.