The great saga of Wembley is finally over. The old Venue of Legends has at last been bought in a £320 million deal struck yesterday which will eventually see it turned into an 88,000-seat state-of-the-art national stadium which will form the centrepiece of England's bid to host the 2006 World Cup.

After months of doubts and hold-ups after various rival bids were made, Wembley plc finally agreed to sell its principal asset to the English Stadium National Trust, and contracts were signed yesterday prior to a formal announcement expected to be made to the Stock Exchange this morning.

Yesterday the English Sports Council authorised about £110 million from Lottery funds to be paid to Wembley plc to buy the stadium. A further £10 million will go towards architect and design fees. The rebuilding work will then be paid for by £200 million being provided by the English Football Association.

The most recent hold-up to the deal had been a £229 million rival bid from the leisure group ENIC which, it was reported, Wembley shareholders wanted to examine.

As it turned out it was just one shareholder's wish, and once that formality was complete the deal with was done. The Wembley Arena and Conference Centre were not included in the deal.

The FA has raised its £200 million from the City after guaranteeing a revenue stream by committing all its events to be staged at the new stadium.

It will also be shared with athletics and rugby league. In fact, the race is now on to get the structure finished in time for 2003, when it is hoped to stage the World Athletics Championships, if England's bid wins.

It had been thought that rebuilding work would finish in time to host the 2002 FA Cup final but demolition of the old stadium is not now expected to begin until the summer of next year and the original completion date may have to be re-evaluated.

It is also understood that no design brief has been finalised or planning application made. This would cast doubt on the recent furore about the suggested demolition of the Twin Towers. It is a listed building and work cannot begin until consent has been obtained from English Heritage and the local authority in Brent.

Apart from the bid by ENIC, which already owns 25 per cent of Rangers and also has stakes in the Italian club Vicenza, Greece's AEK Athens and Slavia Prague of the Czech Republic, the property group British Land and Arsenal also looked into purchasing the national stadium.

The Double winners made a bid of about £120 million as they sought a larger home than Highbury, but in the end decided against the controversial move.

The Sports Council could never accept Arsenal as a tenant since Lottery funding does not allow for an anchor tenant which uses it to make profits.

Also, if it did, then Manchester, which was pipped by Wembley for the site of the new national stadium, would raise a howl of protest. It had initially challenged with Manchester City as tenants, and had been told to revise that plan.

It is understood that although the FA will own the freehold of the new stadium it will not be able to gain overall control for 1,000 years because of a lease of 999 years to the Trust. This in turn is subject to a sub-lease of 125 years to the FA.

However, the fact that the new national stadium is one important step nearer will boost England's bid for the 2006 World Cup. The old Wembley would not have made quite such an impression.

The FA's acting executive director David Davies expressed his delight. "This is clearly a huge boost to the 2006 campaign and it is a major milestone in the development of a stadium for the 21st century," said Davies.

"What we have to do now is to press on with increased vigour to make sure that the stadium is ready for the 2003 World Athletics Championships and then, we all hope and pray, for the major event in 2006.

"We congratulate Ken Bates and the FA staff who have worked long hours on this deal."