Melbourne racing is facing a major upheaval following the announcement by a local council that it intends to kick all trainers off Caulfield racecourse.

The Glen Eira council announced its intention in a position paper adopted at a meeting on Tuesday.

The council claims regulations concerning the use of the crown land on which the racecourse is built call for its equal use for horseracing, as public recreation ground and a public park.

But the racing and training of horses on the racecourse heavily dominates the use of the land.

The Melbourne Racing Club (MRC) which conducts racing at Caulfield and owns most of the adjoining land occupied by racing stables, including that of world champion sprinter Black Caviar, believes it has an agreement allowing the land to be used as it has been for more than a century.

The club said on Wednesday it is "surprised and disappointed" by the latest council move.

"We have been been working with Council in a respectful and engaging manner of its own initiative to improve the community amenity and access at Caulfield," the MRC said in a statement.

The MRC said it has a formal agreement with the Glen Eira council to operate on the crown land in the way it does.

An agreement adopted in April 2011 between the MRC and the council acknowledges: "That the Council adopts the attached Agreement between the Glen Eira City Council and the Melbourne Racing Club in relation to the Centre of the Caulfield racecourse Reserve and related matters."

Under that agreement the council noted a requirement for the MRC to create, fund and maintain five activity precincts on the land.

The MRC says it has spent some $2 million to develop such precincts.

"Council by adopting this Position Paper have specifically contradicted many of the items formally agreed between the MRC and Council," the MRC said.

Through a land swap agreement with the state Department of Sustainability and Environment, the club says it also offered approximately 6,300 square metres of park land to the council.

It says the offer was refused and the land is now held by the Crown.