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The Otago Regional Council is selling properties it owns in North Dunedin after pulling out of protection work on the flood-prone Lindsay Creek due to the cost of the project.

The regional council has advertised three properties for sale in Northeast Valley and one in Normanby which it originally intended to use as part of the Leith Lindsay Flood Protection Scheme.

Regional council support services manager Gerard Collings said he understood funding constraints were the reason for the Lindsay Creek part of the scheme being halted, although the council would retain rights to work on portions of the properties closest to the stream so it could start that work if it decided to in the future.

The plans involved ''extensive remodeling'' of the creek, he said.

A 2014 regional council report outlined the flooding of Lindsay Creek as being a ''regular occurrence''.

''Several hundred residential properties have some degree of exposure to flood hazard, along with three schools, Ross Home and the Otago Community Hospice, roads including North Road, which is the main access to Northeast Valley, and a number of commercial properties,'' the report said.

The regional council purchased the properties in about 2005, and they were tenanted at various times.

One of the properties was found to have lead contamination and a family living there at the time contacted the Otago Daily Times in 2009 saying they were never told.

The level of contamination was such that ''people especially young children should refrain from eating the soil, fruit and vegetables from the site'' until it was remediated, Mr Collings said.

''The type and level of contamination is being made available to prospective purchasers.''

The Leith project is continuing and in March work began on a section between Union St bridge and Clyde St.

This includes raising the wall along the right bank, putting in a new retaining wall along the left bank, stabilising the river bed and channel walls and providing public access to the river bed and terraces along part of the left bank.

The Otago Daily Times could not get comment from regional council engineering, hazards and science director Gavin Palmer yesterday regarding how much the Lindsay Creek section of the work was expected to cost.