The Victoria Racing Club has entered into negotiations to sell two parcels of land adjacent to Flemington racetrack.

Just over one hectare of the land is in the vicinity of the main public entrance at the Epsom Road end of the course.

Another three hectares is in the Hill Land precinct, an area comprised of car parks.

The land has been earmarked for development as part of the club's masterplan with profits made from its sale to fund improvements to the course.

VRC chairman Michael Burn said draft versions of the development concept would need to be vetted by the club.

"The document states the concept must be of suitable quality and design to complement and respect the Flemington Racecourse precinct," Burn said in a statement.

The VRC has signed a Memorandum of Understanding with a subsidiary of the Chinese-owned property development company the Greenland Group to prepare the development concept.

The negotiation process, which will include an analysis of the development's impact on cultural heritage and transport, is expected to take up to six months.