Plymouth City Council has agreed to purchase Home Park from financial-stricken Plymouth Argyle.
Under the terms of the deal the council will pay £1.6m for the ground and rent it back to the club for £135,000 a year.
The agreement has paved the way for businessman James Brent to complete his takeover of the club, with discussions now believed to be at an advanced stage.
Arygle, who bought the ground from the council for £2.7m in 2006, went into administration in March.
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