Before it can do that, the council needs Parliament to pass the Reserves and Other Lands Bill - at present before select committee hearings - which will lift a reserve designation over the land.
In 2004, the council decided to subdivide 5.84ha it owned on Cape Wanbrow into 27 sections to help pay for community projects, including the $10 million redevelopment of the opera house.
More than half of the sections had been sold, at more than $300,000 each, making them the most expensive of their type for residential land in Oamaru, but the council then found it could not issue titles nor go ahead with selling the rest until reserve status over some of the land was lifted.
The council maintained an error in the 1930s resulted in the land being designated.
Yesterday, Mr Familton told a council meeting: "The development of Forrester Heights will progress."
He said the project had been positive and progressive for the community, which looked forward to its completion.
The project would "be seen by future generations as a jewel in their crown".
The council had made a submission to Parliament's primary production select committee and deputy mayor Gary Kircher, with chief executive Michael Ross, had appeared before it.
"We are confident the land status correction it [the Bill] deals with will occur," Mr Familton said.
The Forrester Heights land is one of several parcels of land the Bill is dealing with in New Zealand.