The state government has introduced legislation to repeal a requirement for a nearby coal mine to house its workforce in Glenden.
The mayor says the council and Glenden community were "blindsided" by an abrupt policy reversal.
Registrations of interest will open to buy houses, commercial buildings, and a lease of the entire town.
Plans to save a small Queensland mining community from becoming a ghost town are being ended under proposed laws.
Legislation forcing nearby coal mine workers to relocate from a work camp into the town of Glenden would be removed by amendments introduced to Queensland Parliament this week.
The accommodation requirement for workers at QCoal's Byerwen mine was legislated in 2023 by the former Labor state government, following a concerted campaign by the local council and residents.
The government has instead opened registrations of interest for homes, commercial buildings, and a lease of the entire town, 160 kilometres west of Mackay, to draw private investment.
Isaac Regional Council Mayor Kelly Vea Vea said the community was "extremely surprised" by the decision.
"The legislation that was introduced to parliament yesterday completely blindsided my council and blindsided Glenden," she said.
Glenden sits on land leased by Newlands coal mine owner Glencore, which took over its assets in 2013.
When the mine transitioned to closure three years ago, the Queensland government legislated plans to shut down QCoal's Byerwen camp by 2030, over fears the town could be left empty.
In March last year, Resources Minister Dale Last pushed back dates that had been set for gradual introduction of the workforce, citing issues with Glenden's water infrastructure.
Speaking to Queensland Parliament on Tuesday, Mr Last said the laws introduced by the former Labor government were rushed.
"There was no consultation, no consideration of the impact on services and no consideration of the future of that community and the impact that would have," he said.
Under the new proposal, QCoal would be able to renew its mining camp lease beyond 2030.
Tina Keogh lived in Glenden for 13 years, and her husband worked in the region until about a year ago.
She said it was a tight-knit community where "everybody knew everybody", and she was sad to see empty homes on a recent visit.
"We left 10 years ago; nobody has occupied our house since we left," she said.
"The people that are living [out] there that have been there for so long … they've got to find somewhere else to go.
"They can't expect to hold onto a town when there's nothing there."
Cr Vea Vea said she would meet with the resources minister to discuss the proposed legislation changes.
She said she had been hoping to see government investment in infrastructure left behind by Glencore.
"I'm really disappointed that the state government has chosen this path and refused to communicate this to us or the community," Cr Vea Vea said.
"Every month that the state government has chosen to kick the can down the road of resolving these issues, families have continued to leave.
"The school has continued to shrink, and the community continues to have a lack of certainty."
Mr Last and QCoal were contacted for comment.