Porter Aviation Holdings Inc. has put the passenger terminal attached to Billy Bishop Toronto City Airport on the auction block, according to people familiar with the matter.

The sale is expected to value the terminal at more than $500 million, the people said. Porter Aviation's lease on the terminal expires in 2033, but it is being offered to buyers with the option for renewal, the people said.

Porter Aviation is working with RBC Capital Markets and Barclays Capital on the sale process, the people said. Porter Aviation will use the proceeds from the sale to grow its airline business, one of the people said. Porter Airlines currently offers flights to cities including Toronto, Montreal, Ottawa, New York, Chicago, Boston and Washington.

Potential buyers include infrastructure-focused private-equity firms and pension funds, which like airport investments due to the stable nature of their returns.

Last year, Public Sector Pension Investment Board of Canadaacquired the airports division of Hochtief AG , while a division of the Ontario Municipal Employees Retirement System acquired airport assets from TBI Ltd. Also last year, Australia's IFM Investors bought a stake in Manchester Airports Group, in conjunction with the airport operator's acquisition of London's Stansted Airport.