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The Graythwaite estate in North Sydney has been sold to the Sydney Church of England Grammar School for $35.2 million.
The controversial estate was donated to the government in 1915 by Sir Thomas Dibbs to be used as a convalescent home for World War 1 soldiers.
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The government then put the historic 2.7 hectare property out to tender in August.
The Grammar school has said it will restore the original Dibbs mansion and surrounds linking them into the remaining Dibbs estate on which the school is built.
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