The Department for Environment, Food and Rural Affairs has told MPs it plans to hold a consultation on selling parts of Forestry Commission land in England.
The Forestry Commission's estate covers 18% of England's wooded areas, some of which provides domestic timber.
Defra said the government has "reiterated its firm commitment to biodiversity and other public benefits which forests and woodland provide".
And it said it would consult the public on its proposals later this year.
Defra said its plans were a "new approach to ownership and management of woodlands and forests, with a reducing role for the state and a growing role for the private sector and civil society".
The Forestry Commission forests in England cover 257,000 hectares (635,000 acres).
Defra said it had sent the letter to explain the "modernisation of the forestry legislation" in the Public Bodies Bill, which has just been introduced into Parliament.
Its letter also said Defra envisaged "a managed programme of reform to further develop a competitive, thriving and resilient forestry sector that includes many sustainably-managed woods operating as parts of viable land-based businesses".
Measures would remain in place to preserve the public benefits of woods and forests under any new ownership arrangements.
Tree felling would continue to be controlled through the licensing system managed by the Forestry Commission, public rights of way and access will be unaffected, and protection for wildlife will remain in force.
There will also be grant incentives for new planting which can be applied for.
But Stephanie Hilborne, chief executive of The Wildlife Trusts, said a "clear policy" was needed before any land sales are made.
She said: "The Forestry Commission owns a substantial amount of land which is of high value for wildlife. This represents a tremendous national asset.
"Transfer of such land should not take place before a clear policy has been established. This policy should ensure that those areas of high wildlife value - including Sites of Special Scientific Interest and Local Wildlife Sites - are secured in the long term.
"If such sites are to be transferred, the best way to guarantee their future would be to give priority to nature conservation bodies."