Brisbane City Council (BCC) signed a multi-million-dollar contract to sell designated city parkland to a businessman who is also a significant donor to the Liberal National Party, the ABC can reveal.

Key points: $3.3 million deal to sell off parkland was reached without public tender

$3.3 million deal to sell off parkland was reached without public tender Businessman at the centre of the deal is a LNP donor

Businessman at the centre of the deal is a LNP donor Council says the deal was in the public interest

The conditional contract, obtained by the ABC, for the $3.3 million sale of the land near Brisbane Airport was signed in August last year without public tender, advertisement or auction, as required by Queensland Government regulation.

Lord Mayor Graham Quirk, who along with his LNP administration is seeking re-election on March 19, said he was aware the prospective buyer was an LNP donor but argued the deal was in the interest of ratepayers.

Labor's mayoral candidate, Rod Harding, said the Lord Mayor and his council had questions to answer about the direct land deal.

To be allowed to sell the land the BCC had to seek a ministerial exemption, which it applied for last year.

But the deal will not proceed after Local Government Minister and Deputy Premier Jackie Trad rejected the application last Friday.

The 8,521-square-metre block is currently designated as "parkland area" under the Brisbane City Plan 2014, meaning it has been set aside for public use for recreational, cultural and educational activities.

The documents obtained by the ABC reveal that council was approached in April last year by businessman Boon Tan to buy it for $2.75 million.

The land is next to Dr Tan's East Coast Car Rentals business at Nundah.

"Mr Tan approached me in the middle of last year about his business, it was booming, it was busting at the seams, he was seeking additional land," Cr Quirk said.

"I gave advice to him, the same as I would to any individual, which is in accordance to the law that he needed to make an offer, if he wanted certain lands, through the CEO of Brisbane City Council. Now that occurred."

'Half a million dollars of public benefit in deal for ratepayers'

It was later agreed between Dr Tan and the BCC that the sale price for the vacant block would be $3.3 million, plus GST.

This was $400,000 more than an official valuation obtained by the BCC.

"Look, there was half a million dollars of public benefit in this for the ratepayers," Cr Quirk said.

A council solicitor, writing under the letterhead of the Office of the Lord Mayor and BCC chief executive, then acknowledged in September last year that a deposit of $363,000 in the form of a bank cheque had been received from Nudgee Capital Investments Pty Ltd, of which Dr Tan is a director and shareholder.

Dr Tan has told the ABC that his offer for the land "was made through proper channels, is not unusual and is subject to a range of normal conditions".

But for the full sale to go ahead it needed the exemption from a state act requiring a public tender or auction.

The application for the ministerial exemption from the BCC, obtained by the ABC, said the $3.3 million offer from Dr Tan "represents value for money".

But the application acknowledged that "no community consultation has been undertaken relating to the disposal of the property".

BCC chief executive Colin Jensen signed off on the exemption application by declaring that "no material personal interests on the part of any Councillor of Council exists in relation to the proposed disposal of the property".

Donations search reveals links between businessman and LNP

A search of the donation declarations on the Electoral Commission Queensland website reveals that East Coast Car Rentals donated $47,300 to the Liberal National Party during the 2014-2015 financial year.

A further $11,000 was donated that financial year by Dr Tan or other companies of which he was a director.

One donation for $3,000 is listed as "Council Campaign Fundraising Contribution".

Dr Tan said his political views were irrelevant and the proposed transaction was approached with the utmost propriety.

"We were aware he was a donor, but this was a matter of public interest," Cr Quirk said.

"This was a matter of, was the offer one that was in the public interest because we always knew this was going to the Labor State Government [for approval]."

Mr Harding said the BCC had failed the transparency test.

"They actually signed the forms saying there was no potential conflict of interest, even though the buyer was a long-term donor to the LNP," he said.

In a statement to the ABC, the Local Government Department said it:

"Sought further information from Brisbane City Council before providing a final recommendation to the Minister, whether to approve Council's request to be exempt from an open tender process. BCC failed to provide sufficient evidence to support an exemption from an open tender or auction for the sale of this land. The Deputy Premier did not approve the exemption."

The Lord Mayor accused the Labor State Government of putting politics before ratepayers ahead of the March 19 BCC election.

"Three weeks before an election, after they've had it sitting on the desk for six months, does seem passing strange," Cr Quirk said.