The Irish Greyhound Board has agreed to sell the Harold's Cross Stadium in Dublin to the Department of Education.
It is expected a number of schools are to be built on the site, subject to a review.
The Board closed the stadium in February as it struggled with legacy debts related to the construction of Limerick Greyhound Stadium.
Protests have been ongoing since then from both greyhound owners and breeders and there has been no racing at Shelbourne Park because of demonstrations there.
However, it was announced that the IGB had agreed to sell the site to the Department of Education.
The proceeds of the sale will be used to pay down the board's €20 million debt.
The Department of Education intends to use the land for new schools for the area. In a statement, it said the exact configuration of schools to be provided on the site will be informed by the outcome of a review.
Reacting to the development, Labour's Alan Kelly said the board had serious questions to answer.
He said it was incredible that a State body had agreed to sell such an important site and recreational amenity without a full public tender.
The Department of Agriculture said in a statement it fully recognised the "difficult financial position" the IGB has been for a number of years.
"This has been exacerbated by high levels of legacy debt," the statement added. "This is why Indecon Consultants were commissioned to carry out a review of the greyhound industry. They made a number of recommendations to improve the financial situation of the Board and to reduce debt levels."
The statement continued: "Indecon recognised that the Board's operating revenues were not sufficient to make a significant impact on the debt levels and therefore recommended that consideration be given to the sale of a number of specified assets, including Harold's Cross Racing Stadium.
"The Board has accepted the Indecon recommendations and has indicated that it has agreed to the sale or Harold's Cross Stadium to the Department of Education for the purposes of building a school, subject to obtaining the necessary consents.
"The Minister for Agriculture, Food and the Marine will consider the proposal for the sale of the stadium when it is submitted to him."
