ASB has given the $150 million Auckland city farm it owns to the school which has leased it for nearly a century.

Vittoria Shortt, ASB chief executive, said today the bank had given the 8.1ha site it had owned since 1933 to Mount Albert Grammar School which has leased the land for 89 years.

This would secure farm education for future generations of students, she said.

The bank has owned the land next to the school since 1933 and for the past 89 years it has been used by the school to teach students agriculture and horticulture, offering them hands-on experience and inspiring them into potential careers in the rural sector, she said.

Agriculture and horticulture are this country's leading commodity exports, but people in the sector have struggled lately because of labour shortages.

Asked what shareholders in ASB's owner - ASX-listed Sydney-headquartered Commonwealth Bank of Australia - thought of giving away a $150m property, Shortt said: "It's really a decision for the ASB board. We exist to serve the people of New Zealand and it's a decision we've made based on that.

"ASB's support of this facility is one of the ways we're backing the future of these industries, by helping to inspire the next generation to take their first step into a career in farming or horticulture," Shortt said today.

The agreement secures the vast majority of the land as an educational farm in perpetuity, meaning it will continue to benefit future generations of MAGS students, she said.

The land will be given to the Mount Albert Grammar School Foundation.

The farm in Mt Albert: gifted to the school. Photo / Dean Purcell

Patrick Drumm, the school headmaster, said the school was extraordinarily grateful for ASB's support.

"The farm provides unique educational opportunities and we now have around 200 students going through the farm education programmes annually," he said referring to all year levels in the school with 3100 pupils.

Programmes run from the farm are for junior, NCEA and University Entrance level pupils.

"The farm provides a really unique opportunity for a school in the centre of New Zealand's largest city, turning urban kids on to opportunities in the primary industry which we desperately need right now," Drumm said.

Being told of the gift during the centenary week last month was even more significant, he said.

Asked if it made any difference who owed it, Drumm said the core educational principles of the school were acknowledged by the transfer "and it gives the school more autonomy to develop the educational potential of the site. This is about developing human capital".

Mount Albert Grammar School headmaster Patrick Drumm. Photo / supplied

The farm was a non-realisable asset and it would remain that way, he said, because it was protected by legislation. The school had a 99-year lease on the land with around 90 years remaining.

CBA shares are trading around A$92 on the ASX, giving a market cap of A$158.78b.

One neighbour welcomed the ownership transfer but said Drumm wrote to people in the area a few years ago asking them not to walk on the farm. That was "really sad" because the neighbour said he took his children and grandchildren there for many years to fly kites.

The neighbour recalled how around 2016, Wesley College had sold its 277.7ha farm at Paerata, south Auckland. A group of ex-Wesley students said developing hundreds of houses on the farmland not only eroded the school's identity but was initiated without consulting the school community.

Mount Albert Grammar School said the ASB MAGS Farm was established in 1932, when the Auckland Institute of Horticulture decided that city kids were losing farming knowledge and asked the school to run special programmes to keep up interest.

Vittoria Shortt, ASB chief executive. Photo / supplied

The Auckland Savings Bank got involved on a charitable basis and legislation was passed to allow the bank to buy land from the neighbouring Kerr-Taylor sisters' farm and lease it to the school for a peppercorn rent, the school said.

In 2013, the school and the bank agreed to a new lease on a 99-year term for $1/year.

Mount Albert Grammar School is New Zealand's second-largest school after Rangitoto College. It was founded in 1922 and celebrated a centenary week in late September.

ASB's Vittoria Shortt with the school's Patrick Drumm: deed being handed over. Photo / supplied

The Charities Register showed The Mount Albert Grammar School Foundation was registered in 2011 to make grants to organisations including schools or other charities.

It had total income of $317,105 in the September 2021 year and an expenditure of $380,964. Total assets were listed at $1.1m.

Drumm said the school couldn't use the land for anything other than the farm.

"There is a covenant registered on the land to ensure the original purpose of the farm remains protected. In essence, it locks in the wishes of the Kerr-Taylor family at the time of the original 1933 transaction that the land be used for agricultural education."

He said that covenant ensures the foundation keeps the farm to educate students in primary industry-related careers.