Preston Le Skerne, which follows the River Skerne to the east of Aycliffe, comprises just a scattering of farmhouses and the Blacksmith's Arms, which dates from the early 1800s and was originally two stone cottages.
A stone extension was added to the property in the 1960s.
The property is set in about five acres and has potential for possible conversion to residential or equestrian use.
The Blacksmith's trades as a traditional country freehouse owned and won the Camra Country Pub of the Year Award in 1999.
The pub is situated just one mile off the A167, and attracts trade from many local villages and towns.
The Blacksmith's Arms stands in its own grounds with land to the front and side.
At the rear, there is a private garden, children's play area, beer garden and a small animal enclosure.
The pub is full of character with original timber beams and a stone fireplace.
It comprises a bar area to seat 30 customers, lounge/restaurant to seat 40 diners, a fully equipped catering kitchen and well appointed five-bedroom owners' accommodation, which has been recently refurbished.
David Lee from Christie & Co, who is handling the sale, comments: "The Blacksmith's is currently run on restricted hours to suit our clients, but it has an excellent reputation as a tranquil country pub in a lovely rural setting, offering good food and beer.
"We anticipate a high level of interest."
Christie & Co is seeking offers over £400,000 for the freehold interest.