Landcorp is in the final stages of moving out of the Taupo basin so it does not get caught by restrictions on livestock farming.
Waikato Regional Council has imposed rules on land use to protect the water quality in Lake Taupo by permanently reducing the amount of nitrogen flowing into it.
The aim is to lower nitrogen discharges by 20% - mainly by restricting livestock farming in the lake catchment.
Landcorp had about eight farms in the area. The State-owned company has now sold most of those and has signed sale and purchase agreements with local iwi for the remaining two, Tauhara South and Wairakei Station.
Chief executive Chris Kelly says forestry is not the company's core business and Landcorp wants to totally exit the area by June 2010.
He says the new owners have been looking at forestry and carbon credit options as well as geothermal potential.
Meanwhile, Landcorp is offsetting the loss of deer farming land in the Taupo district by expanding its deer farming operations in Te Anau.
Mr Kelly says deer farming and dairying make up about 50% of Landcorp's operation: the other half is sheep and beef.