Under a clause when the airport was established in the 1990s, if it failed to make a profit in 10 years, ownership of the land at Tinsley Park would be transferred from Sheffield Council to the operator for a nominal £1 fee.
But now it has emerged that the sum will not be collected.
A Sheffield Council spokeswoman said: “It is commercial custom and practice not to demand the £1. This is because it would actually cost more in staff time and legal expense than we would get back.
“It is therefore not deemed good use of tax payers’ money to pursue £1.”
She added failure to collect the sum had ‘no impact’ on the legality of the land transfer.
But campaigner Stewart Dalton, 63, from Westfield, criticised the decision.
He said: “We’ve given away 120 acres of land through the airport deal. When the facility was created, the old Sheffield Development Agency gave the owners 40 acres of land to set up a business park.
“Now they’ve received 80 acres for nothing. It’s an absolute scandal.”
Steel magnate Andrew Cook, of William Cook Holdings, who tried to buy the airport as a going concern for £1 million before it closed in 2008, said: “It’s time someone stood back and asked what the hell we are doing allowing this to happen.
“The deal which allowed the airport to be closed and the land transferred for £1 was an absolute outrage which encouraged the operator not to make a profit.”
A spokesman for Sheffield Business Park - the joint venture between airport owner Peel and private investors said: “The viability of the airport was assessed by aviation industry experts in 2004.
“In July 2005 the council’s cabinet accepted the findings of the report, which said the facility had no future as a commercial airport.
“Six years on, that view has not changed.
“We have no further comment.”