On July 24 a committee recommended it should go ahead and the proceeds will go towards redeveloping their Fairfield Halls entertainment venue.
The council's 230-piece antique Chinese ceramics collection was bequeathed by local businessman and collector Raymond Riesco in 1959 and includes Tang dynasty tomb models and Ming dynasty bowls.
Councillor Tim Pollard, cabinet member for children, families and learning, said the costs of maintaining the collection did not provide value for money to Croydon taxpayers, "whereas the possibility of investing in the future of the Fairfield Halls will breathe new life into culture in Croydon for residents to experience and enjoy in the 21st century".
The decision has been criticised by, among others, Arts Council England. Scott Furlong, ACE director of acquisitions, exports, loans and collections, confirmed to www.museumassociation.org that they would be assessing Croydon Council's accreditation status in the coming months.
ACE distribute public money from government and National Lottery funding.