The 19.3ha site at Lake Pukaki is now for sale, and Bayleys Canterbury salesman John McPhail said the land was ''a piece of South Canterbury history''.
Mr McPhail said because Twizel was originally established in the late 1960s to house works and plant needed to construct the Upper Waitaki hydro power and dam system, the initial life expectancy of the township was just 15 years, after which the town was to move to Lake Pukaki.
He said although the Upper Waitaki project ended in 1986, a change to government policy combined with ''vociferous'' lobbying by Twizel locals meant the town was never relocated and the Lake Pukaki site was never commissioned.
The site was the only land within the Mackenzie District Plan with zoning to allow for residential subdivision and commercial business operation.
''The property is now classified as the Pukaki Village Zone - a special purpose zone established under the Mackenzie District Council District Plan. This zoning allows for a tourist and holiday village with a maximum capacity of 1000 people.''
He added that an attempt by the Mackenzie District Council to rezone the land under a Landscape Protection Area classification was blocked by the Environment Court in 2010, but a subsequent change to the council's district plan provided greater protection to the Mackenzie basin from both residential and commercial subdivision.
''As a result, consent for any further subdivision or development within the basin has now become much more restrictive and difficult to obtain.''
The existing zoning restricted building coverage to a maximum of 10% of the site, and structures on the land had to be designed and built to have minimal impact on the surrounding landscape and environment, he said.
Although the site had a 2012 rateable valuation of $1.9 million, he said until the auction on September 5, it was ''near-impossible'' to put a potential value on the land.
''Aside from the lakeside location and unrestricted views across to Aoraki Mount Cook, the value of this land lies in the rarity of its zoning classification. There simply isn't anything else like it in the locality.''
Twizel resident Rick Ramsay said he had lived in the township since 1977, but the original context of the existing site was included in the district plan as a replacement for the old Pukaki Village, which was swamped during the dam-building process.
''The council at the time said they wanted that village replaced by another one. Twizel, of course, was a construction town. The council at the time didn't see that as a replacement. They wanted their little village back. So that site was chosen and identified ever since.''
However, because the site was identified as a tourism village in the district plan in 1990, Twizel locals had never been given the chance to relocate.
''Twizel was just going to be bulldozed and that would be the end of it, so the fight for Twizel began in the 1970s.
"Twizel people always firmly believed that there was a future for the town, where it was and what it was and fought for that, and have been successful ever since.''