AS GOVERNOR of the Beechworth Gaol from 1856 to 1869, John Buckley Castieau oversaw prisoners, not tourists.

Back then, Castieau's Castle - as the gaol was known - was to house Ned Kelly and his gang and was the site of eight executions.

    1, 2 & 3 QUARRY HATCH LANE
  • BEECHWORTH
  • Property: lifestyle/commercial
  • Size: 1374sq m
  • Price: $747,500 for all three and site
  • Agent: LJ Hooker Beechworth and Hodges Real Estate
  • Contact: Dean Lupson, 0458 527 632 or Andrew Boyce, 0418 312 473
  • Pictures: Old Beechworth Gaol

Now, it attracts more than 30,000 tourists a year who come to experience the jail, renowned for its granite walls, as Australia's most infamous inmates did.

Closed in 2004, it has since been given a new lease on life in tourism but the former governor's quarters await their reckoning.

Built in 1864 with prison labour and from the same granite as the fortress behind it, the quarters have been divided into three cottages and will be offered for sale for the first time, as a whole or individually.

They are part of the larger Watchtower Rise development, which takes in the Beechworth Gaol and 20 house and land packages.

Much like the gaol, the cottages are a well-preserved time capsule.

Castieau was the first resident and stayed on until 1869 when he became governor of Melbourne's Pentridge Prison - it was in this role he is recorded as the official government representative at the hanging of Kelly in 1880.

His diaries, The Difficulties of My Position: The Diaries of Prison Governor John Buckley Castieau 1855-1884 (edited by Mark Finnane and published in 2004) provide an insight into a career spent in the Victorian penal system.

The title goes some way to explaining its flawed writer; a well-educated, artistic and impulsively generous man undermined by his onerous role and many vices.

As noted by historian and book reviewer Ged Martin, "part of (his) challenge to respectability came from within: he could not handle the colonial custom of shouting rounds of 'nobblers' and was often at risk of drinking more than was good for him, an inconvenient weakness in one dedicated to uphold law and right conduct".

Appointed to Beechworth at age 25, Castieau ruled with an iron fist - perhaps in an attempt to earn some regard professionally.

During his reign, prisoners wore masks in the exercise yards to prevent recognition and were referred to by prison number only.

Regular floggings with cat-o-nine tails often exposed the ribs, which were then doused with vinegar and packed with salt to prevent infection.

It was also in this time Castieau met and married his wife, Polly.

"House very much improved ... commenced at once a domestic life," he recorded after their wedding, six weeks after meeting in 1858.

The couple raised their six children in the governor's quarters and environs of the Beechworth Gaol and it's assumed this marked increase in domestic duties explains an absence in diary entries through the 1860s.

However, history shows Castieau remained a prominent figure in Beechworth civic life and was especially involved in its athenaeum (now the Burke Museum, complete with the Burke Memorial Window he commissioned).

By the end of his tenure at Beechworth, prisoner rations had improved to include bread, meat, potatoes, porridge, salt and soap.

All of the Kelly gang spent time languishing at His Majesty's pleasure at Beechworth - Ned three times between 1870 and 1880 and his mother, Ellen, with a three-day old baby, in 1878.

According to the Melbourne-based developer of Watchtower Rise, Sam Lawson, it's this history that makes the governor's quarters so valuable.

"The whole Kelly gang and many of their associates were in there over the years and there are still families in this region that have a connection, whether it be a relative who worked there as a guard or a lawyer or just those in the local community at the time," Mr Lawson said.

"Everyone feels that there is a piece of them there. For me, it's the pre-eminent site in the North East."

An experienced developer in the North East, Mr Lawson envisages a cultural and historical precinct that will blend commercial and residential property.

"When I saw this - such an iconic building - it was hard to resist having a look at doing something to bring it back to life," he said. "For now, though, we are focused on getting some fabulous new houses built out the back and more foot traffic through the gaol itself on tours and holding a few more functions there, too."

Concept plans reveal the potential to transform the disused cottages into homes, bed and breakfasts, or combinations of the two.

All three cottages require substantial renovations.