A leaked cabinet paper has revealed that Dapto TAFE is to be closed, and other sites across the state are to be partially sold off, raising $63 million.

News that Dapto TAFE is to be closed and sold off for $2 million may come as a shock, but it won't come as a surprise.

The campus hasn't taken on any new enrolments since earlier this year, and staff began to be redeployed to other sites.

Also in the firing line is the larger, Wollongong West campus, that will be partially sold off to raise $1.33 million, and a vacant block of land in Vincentia, ear-marked for TAFE.

Greens MP John Kaye says the 'cabinet-in-confidence' document lists campuses that are being considered for either a full or partial sale.

Mr Kaye says it's clear the Premier Mike Baird wants a smaller public system.

"The same training market that's being implemented by the Baird government took the Victorian TAFE system to being a minor player with less than 20 per cent of all students," he said.

"It's privatisation and we see the beginnings of that with the buildings that are being sold off."

The Dapto campus of TAFE sits in one of the fastest growing urban areas of the Illawarra.

The local state MP Anna Watson says under the previous state Labor Government Dapto TAFE had over 650 students and 110 staff, but now its being systematically gutted.

"We have slowly seen this TAFE gutted like a blue fin tuna," she said.

"I think the people of Dapto and West Dapto ought to be very disgusted and upset about this."

Illawarra TAFE Institute Director, Dianne Murray, says the Dapto campus currently has just eight remaining students, but the campus continues to advertise courses.

Ms Murray says TAFE corporate services staff are being moved to West Wollongong and school education staff are being moved directly to schools.

She says she can't comment on suggestions the state government wants to sell it off.

"We still have courses advertised at the moment, unfortunately students are choosing to study elsewhere where he have invested a lot of money in upgrading facilities," she said.

The ABC has obtained a leaflet advertising TAFE courses for school students for 2016 and it makes no mention of a campus at Dapto.

The Managing Director of TAFE New South Wales Pam Christie says nothing's been decided, but it's part of a bigger plan.

She rejected claims the plan involves shifting more students to online courses.

The government's parliamentary secretary for the Illawarra, Gareth Ward, was clearly caught by surprise at the cabinet document leaked by Greens MP John Kaye.

The Kiama MP said that no-one had briefed him about the news, and declined to comment until he had the full details.

Anna Watson has challenged Mr Ward to join her in a community fight to save Dapto TAFE.