Heritage enthusiasts keen for the decaying building to return to public ownership hoped the university might express interest in buying or leasing the Hunter Street property.

The institution is planning inner-city campus expansions.

National Trust Hunter regional committee chairman Keith Parsons said that the university taking control of the site would be a good outcome.

Expanding the Lock-Up cultural centre into the post office was another option the committee favoured.

"At the end of the day, we want to see the building adaptively recycled in a sympathetic way," Mr Parsons said.

"It doesn't necessarily mean we're against it being privately owned or privately developed."

Vice-chancellor Nick Saunders said the university was not pursuing any interest in the property.

However, he believes the former post office should return to public ownership.

While the building was not suitable for the university's teaching and research, it had potential for community and cultural activities, Professor Saunders said.

Newcastle RSL sub-branch president Doug Jackson also ruled his organisation out as a potential buyer.

The site was for a time considered a potential home for the RSL's new club, after Australia Post announced in 2000 its intention to vacate.

Present owner, Sydney developer Sean Ngu, is putting the post office to auction on May 13.