The college is set to leave its main base for a new city centre learning quarter over the next few years.
College leaders have now confirmed the Paget Road campus will be sold after the move.
It was always likely the site would be sold off but college officials had previously been coy on its future.
Housing developers have shown an interest in the vast plot of land in the past.
Mal Cowgill, principal and chief executive, said: "As part of the development of the college's new city centre campus within the City Learning Quarter, the Paget Road campus will be sold following the move to the new site.
"At this stage, no decision has been made regarding who it will be sold to or for what purpose it will be used."
Learning quarter plans gather pace
A multi-million pound learning quarter will be established along Bilston Street.
Work is under way to knock down the old Faces nightclub, the site of which will form part of the learning quarter.
The move to the city centre is expected to happen in 2021.
A city council report said the sale of the site would bring in vital funds to support the college.
The report said: "The aspiration of the project is to concentrate the College onto two main campuses, in the city centre and at Wellington Road in Bilston, enabling the current campus at Paget Road to be disposed of and helping secure the future of the College."
College leaders had been keen to move away from the outdated Paget Road campus to a more central location, in an effort to make it more attractive to potential students and decrease the need for them to use cars to access the college.
The formation of the city centre learning quarter promises to provide a major boost for education in the city.
The ageing Paget Road building has become worn down over the years.
Wendy Thompson, who leads the Conservatives in Wolverhampton, said: "We have heard for some time there might be housing development on that land.
"Housing does seem to be appropriate but the college encompasses a very large area and I am concerned about green space in Wolverhampton.
"We would want any development to be kept with footprint of the buildings already there because it is important green space is kept as much as possible."