Dun Laoghaire-Rathdown County Councillors have voted to sell a piece of land in Stillorgan to Cairn Homes in exchange for a sports hall.
The land is located on the site of the former Blake's restaurant and is just over 1,000 square metres - one tenth of a hectare in size.
Cairn Homes will pay the Council €2.2 million upfront but this will be returned to the developer once they complete construction of the sports hall.
The council will then have a 999 year lease on the sports hall.
Some councillors were opposed to the disposal of the land, with Labour councillor Carrie Smyth describing it as a "missed opportunity".
She said during last night's council meeting: "I think we need to be clear here for anyone watching who hasn't attended the briefings, that the council aren't getting €2.2 million, they're getting €2.2 million but we have to return it when they get the sports hall completed in turn key condition.
"So we're just getting a sports hall, which I think is a missed opportunity.
"I don't think we're getting value for money."
Fine Gael councillor Jim O'Leary was among those who supported the proposal.
He said: "I'm happy to support this proposition. As has already been said, there are benefits for the developer but there are also benefits for the wider community.
"I think it's an example of when resources are pooled, the sum of the total far exceeds what would be gained if each was to go their own way.
"I think we have to move away from this idea that just because the developer benefits, somehow everyone else loses."
Councillors passed the proposal with 30 votes for and 10 against.
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