As part of the land sale conditions in 1971, Scarborough Council decreed that the land could only be used for "educational purposes".
Located next to Graham School and Woodlands Academy, the land has been used as a playing field for various sports activities.
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However, North Yorkshire County Council now wants to sell the land on Woodlands Drive to the Yorkshire Ambulance Service to accommodate the expansion of Scarborough Hospital.
Building work to create a new £47m emergency care centre is currently ongoing. A new £500,000 helipad was opened at Scarborough Hospital in March, which will allow larger helicopters and night landings for the first time.
The approximately 0.48 hectares of land would be operated by the York and Scarborough Teaching Hospitals NHS Foundation Trust as a new ambulance station.
Scarborough has an existing ambulance station on Queen Margaret's Road.
Cllr Liz Colling, the cabinet member for inclusive growth, has been asked to decide on the matter.
A document prepared for the cabinet member said that "in order that the land can be used as the site for an ambulance station, a deed of variation needs to be granted to NYCC so that legally the land can be used for this purpose."
The report adds: "The land is no longer owned by Scarborough Council having been sold to NYCC for playing fields in April 1971.
"The restrictive covenant was a condition of the sale so that this use could continue and NYCC could not profit or benefit from other uses."
Scarborough Council's director, Nicholas Edwards, said in the report "there is no detrimental impact to Scarborough Borough Council as it no longer owns the site."
The decision is expected to be made by Cllr Colling on Monday August 8.