The building, which forms part of the Minster Precinct centred around the Cathedral, is also the base for the homeless help group, the Light Project.
While national property consultancy Carter Jonas has been instructed to sell the freehold for the premises and land which make up a 0.51 acre site, the cathedral authorities have pledged to ensure the work of the Light Project continues.
Bids for the building, which was constructed in 1938 and is not listed, and surrounding land are currently being sought.
It is understood the building, which is suitable for a number of uses, could be demolished.
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The Very Revd Chris Dalliston, Dean of Peterborough, said: “The Garden House site in Wheel Yard is now on the market.
“The sale of this property and surrounding land is part of the Cathedral’s long term re-shaping of its finances and in particular its commitment to repay the Church Commissioners, whose support over the past three years has enabled us to stabilise our financial situation and plan for the future.
“We are working very closely with Light Project Peterborough to ensure that their ground breaking work with the homeless can continue, and we’re looking at other long term options, including other sites in the Precinct, where that work can be continued.”
Steven Pettican, Chief Executive Office of Light Project Peterborough, said: “Since 2018 our partnership with Peterborough Cathedral, through the Garden House, has seen the lives of many, many people sleeping on the streets changed for the better.
"We are honoured to receive a commitment from the Cathedral ‘family’ to continue our work together and are looking forward to seeing what the future holds.
"Exciting times for us all."
Nick Muncey, Associate Partner, Carter Jonas, said: “Peterborough’s local planning authority has indicated that the site has a wide range of possible uses for the existing building, or alternatively as a development opportunity following the buildings’ demolition – all subject to the receipt of appropriate planning permission.
He said: "This is a unique opportunity to be part of the iconic Peterborough Cathedral precinct - which rarely becomes available.”
The Garden House is accessed via Wheel Yard.
It is made up of a walled garden surrounding a building of about 2,130 sq ft (190 sq m).
The property is built from concrete block construction with a pitched tiled roof and falls within the Registered Parks and Gardens and Conservation area.
The agents say the property benefits from easy access to a wide range of shopping and recreational facilities and is only five minutes’ walk from the mainline railway station.