MACEDON Ranges Council will transfer its social housing stock to a registered housing agency if there's no opposition from residents.
At its meeting last week, the council decided it would move 32 social housing units to a registered authority able to attract funding.
But the name of the authority will remain confidential.
Councils are not eligible to receive government funding to increase and maintain public housing stock.
About $3 million will be needed in the next 10 years to maintain and upgrade the council's units.
It has 110 social housing units, which are valued at more than $13 million.
About 200 people in the shire are on waiting lists for public housing.
If the council transfers its social housing, it would still retain control of its 49 senior citizens' units.
The council's director of community wellbeing, Karen Stevens, said Macedon Ranges was the only municipality in Victoria controlling a large social housing program without the support of a registered housing association.
The council called for expressions of interest from housing associations in May last year.
Cr Rob Guthrie said finding ways to better manage social housing in the shire had been a long process. He said some low-income housing units were more than 25 years old and needed maintenance.
"The Office of Housing will maintain our interest in this. The rent will be a similar model to what we've had and we're ensuring residents are properly protected."
He said the housing agency would expand the council's stock and start by building at least three more houses.
"This means more residents in properties and less people on waiting lists."
The council will advertise and call for submissions before making a final decision to transfer its stock to the chosen housing body.