A preliminary geotechnical assessment conducted in April revealed that a historic mine shaft was present at the location and could be considered a geo-hazard that may impact project construction.

State officials said authorities were "cleaning up the site" in preparation for the Games and future use.

"Successful remediation of sites for urban renewal is common," a spokesperson said, referencing Melbourne's Docklands and Fitzroy Gasworks.

A remediation plan for the Ballarat site is pending approval by an environmental auditor.

City of Ballarat Mayor Des Hudson claims that there are several positives from the Athletes' Village being located at the former saleyards.

"The work that the state government is undertaking in terms of remediation has advanced the future of the site dramatically," Hudson said, as reported by ABC.

"Any future works to develop the area can proceed years earlier than would have been possible otherwise."

Documents released by the Government showed that La Trobe Street location contains low-level contamination in some areas.

Abestos and heavy metals are among the chemicals considered likely to be present according to an environmental assessment report.

The same report shows that Development Victoria indicated that the remediation preference was for contaminated soil to be removed off-site as it posed a "relatively low risk" to  health.

Victorian Opposition Leader John Pesutto queried of who would fund the removal of the soil.

Shadow Minister for Tourism, Sport and Events, Sam Groth, said the documents also raised concern about the safety of the athletes who would be housed inside the Village.

"This state is the major events capital of Australia," he said, as reported by ABC. 

"We have a reputation that needs to be upheld."

Approximately 300 townhouses are set to be built for Ballarat's Athletes' Village. 

Hudson has said that he hoped that after the Games it would be the "prime site for long-term investment in vital housing and community infrastructure in line with the Ballarat Urban 2040 core strategy".