Western Cape government will proceed with the sale of the Tafelberg property in Sea Point.
The Tafelberg Remedial School site has been an issue of contention between government and activists, who wanted the land to be used for affordable housing.
The R135 million deal, in which provincial government had sold the property to the Phyllis Jowell Day School, had been halted in April following a court interdict.
The Western Cape Cabinet says it has taken all relevant factors into account, including "revenue raising measures currently placed on provinces" and the "instruction from National Treasury regarding fiscal austerity".
Provincial Human Settlements MEC Bonginkosi Madikizela says Cabinet had to consider striking the balance between inner-city development and Treasury's instruction to the province to find revenue due to a shrinking fiscus.
“We need to strike that balance and if we don’t, we run the risk of failing to fund the commitments we’ve made as government.”
Madikizela says the government has various affordable housing projects in the pipeline, with completed projects in the province amounting to over R686 million, with 1,539 units delivered.
Reclaim the City had staged a 48-hour picket near the provincial legislature since Monday in the run-up to Wednesday's Cabinet meeting.