Toronto's economic and development committee, TEDCO, has cancelled its 20-year land deal with businessman Steve Stavro, as a result of an investigation.
The city investigation concluded that TEDCO's lease with Stavro is void because board members were misled about the details of the deal.
The lease was signed by former TEDCO chair Fred Eisen, but the inquiry has not found any criminal intent.
Stavro's Knob Hill Farms sits atop city-owned port land that the city says it may need for Toronto's 2008 Olympic bid.
City Councillor Brian Ashton said Wednesday that Stavro, "can walk away from it, which I'm sure the public would applaud, or he can take legal issue and we'll find ourselves in court."
Councillor Chris Korwin-Kuczynski said he thinks the investigation hasn't gone far enough.
"Clearly we have to protect the integrity of TEDCO by funding out what did go wrong and make sure it doesn't happen again," he said.