A historic 19th-century hall could be turned into two homes and sold off to fund "major work" on the village's church.
Hethersett Parochial Church Council (PCC) has applied for permission to convert St Remigius Church Hall, with the intention of putting it up for sale.
The village Rector, the Rev Derek McClean, said the PCC had been hit by the financial impact of the pandemic, and added it had a responsibility to seek the planning permission.
He said: "The regulations around selling property belonging to the Parish – deeds held in trust by the Diocesan Board of Finance – mean that we aren’t able to just accept any offer but must try to obtain the best possible value for that property.
"It is our fiscal responsibility as a charitable organisation.
"In order to get the best value for the property, we engaged Spire to help us with the process. They have informed us that selling with planning permission will realise a better value for the property and we are, therefore, obliged to go with that understanding due to the aforementioned regulations.
"We are looking to finish redeveloping the West End of the Church building, a project begun 30 years ago."
An unfortunate side-effect of any potential sale would be the need for the dance school which has met in the hall for 37 years to find a new home.
Stella School of Dance holds 32 classes over five evenings per week, and was previously known as the Yvonne School of Dance under the direction of Yvonne Cutting.
Owner Stella Gretsinger said: "We have classes from 4pm until 10 pm five days a week and over 200 pupils aged from three to 63.
"We have looked into finding an alternative venue in Hethersett but so far have been unsuccessful. If we lose the hall we may have to move out of the village and it could put the whole school in jeopardy."
Mr McClean said the PCC had kept the dance school informed "at every stage of the process", adding Mrs Gretsinger "is more than welcome to make an offer for the property" when it goes on sale.
The planning application will by considered by South Norfolk District Council.
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