The Victory, built 250 years ago, is the oldest commissioned ship in the British Navy. It is in the Historic Dockyard at Portsmouth.
Officials said the ship is expensive to maintain and handing its operation to a private body would save money. They said the Victory would still be part of the navy.
The Mary Rose, a warship built for King Henry VIII, is run by a charitable trust.
About 400,000 people tour the Victory annually. Maintenance runs to almost $3 million annually.
"This magnificent ship means so much to both naval people and the whole nation," said Michael Cheshire, a retired navy officer who commanded the Victory from 1992 to 1998. "Selling it to a private firm would turn it into Disneyland and would be its ruin."
Adm. Horatio Nelson died on the Victory's quarterdeck during the Battle of Trafalgar. Nelson's fleet defeated a combined French and Spanish force, making Britain the world's greatest naval power for the next century.
Benedict Cumberbatch's dramatic reading of R. Kelly lyrics is just what you need
Jordana Brewster on Paul Walker: 'He was an enormous presence in my life'