The federal government has no desire to become a tenant in a new Windsor City Hall.

Mayor Eddie Francis was hoping the government would move about 400 federal employees from the Paul Martin Building downtown into a new city hall.

The federal government now says it will sell the Paul Martin Building on Oullette Avenue.

It will then lease space from the private sector for its employees.

As a result, a new city hall will be smaller in scale and the price tag drops to around $35 million.

Francis and Coun. Valentinis were both quick to note the Paul Martin Building is a heritage site.

"I think someone in Ottawa will soon realize you can't sell this building as is because it's historically designated. It's not simply selling building in a city whereby you can just demolish a building and build anew," Francis said.

"This is a heritage building that takes up a whole block. It's a very significant building on our main street," Valentinis said. "Our community is not going to simply stand by and watch it come down."

Francis was also hoping to reach a deal to move the University of Windsor law school to the Paul Martin Building once the federal employees moved out.

He's now working on a new undisclosed location.

City council will further discuss plans for a new city hall at a meeting Jan. 27.

It's to be built next to the existing building by 2017.