It comes after Denbighshire council was granted permission to compulsorily purchase the former North Wales Hospital in Denbigh.
Owner Freemont (Denbigh) Ltd had opposed the compulsory purchase.
There has been a long-running dispute between both sides concerned about the future of the historical building.
The Rightmove website advert said the council "does not intend to develop the site but to work with a third party/developer that will".
The council had agreed to pass ownership of the building to the North Wales Building Preservation Trust, a non profit-making organisation which will receive support from the Princes Regeneration Trust.
The property is set for auction later this month.
A Denbighshire council spokesperson said the owners had the right to try to sell it as the hospital site has still not been transferred into the ownership of the council.
He said the authority would still continue with the compulsory purchase process.
"The High Court's ruling in March means that we are one step closer to handing over the site to the trust.
"However, there are many issues to be resolved before the council can take ownership and for the council to pass the ownership on to the trust.
"If the site is sold in the meantime, the council would need to negotiate with the new owner."

Trinidadian Simmons, who has led the Irish since 2007, is believed to have been interviewed for the job prior to the current World Cup.
BBC Sport has been told that Simmons, 51, has been offered the West Indies post but that negotiations have yet to be successfully concluded.
Simmons's Irish exited from the World Cup after Sunday's defeat by Pakistan.
The coach is under contract with Ireland until December but Cricket Ireland are not expected to stand in his way if he decides to accept the West Indies offer.
A quick Simmons appointment would see him take charge for the Test series against England in the Caribbean next month.
Stuart Williams has been in temporary charge of the Windies since they parted company with Ottis Gibson last August.
Simmons, who played 26 Tests from 1988 until 1997, has been linked with the West Indies job on a number of previous occasions.
And his stock has risen further over the last month given Ireland's impressive performances at the World Cup.
Since replacing Adi Birrell after the 2007 World Cup, Simmons has guided Ireland to the 2011 and 2015 tournaments and earned wins over Test nations England, the West Indies and Zimbabwe.
Simmons's Ireland squad defeated the West Indies in their opening World Cup game in Nelson last month but missed out on a quarter-final spot on run-rate despite further group victories over the United Arab Emirates and Zimbabwe.
During Simmons's tenure, he has guided Ireland to six successive ICC global tournaments while his side have also won 10 trophies contested by Associate countries.

Even though Cuba is less than 100 miles away from the US, the two counties fell out in 1959, and no American president has visited since then.
The fall out was because two brothers called Fidel and Raul Castro took power in a revolution.
America did not agree with how they ran the country.
Since being president, Obama has tried to make America's relationship with Cuba more friendly, and in 2015 he re-opened the US embassy which was closed 54 years earlier.
The owners of a former Victorian asylum in north Wales have put it on the market for potential redevelopment with a £2.25m price tag.
[NEXT_CONCEPT]
Ireland coach Phil Simmons is mulling over whether to accept an offer to take charge of his native West Indies.
[NEXT_CONCEPT]
President Obama has arrived in Cuba, an island in the Caribbean, for an historic three day visit.