True North Sports and Entertainment has bought the property at 220 Carlton Street that was enmeshed in controversy over concerns about conflict of interest.
The company hopes to develop the land into a $400-million hotel, office and residential complex called True North Square by 2017.
True North released a statement Monday that says the company, which owns the Winnipeg Jets, has "exercised its option ... to acquire the property at 220 Carlton Street" from a company controlled by CentreVenture, the city's development arm.
"The exercise of the option today is a significant advancement of our position regarding the development of True North Square," said Scott Brown, True North spokesman.
"We remain excited about the opportunity that this mixed use development has for our community and our organization. We look forward to working with CentreVenture over the next few months as we finalize our design and development plans with CentreVenture, the City of Winnipeg, and our tenant partners."
True North's move ends speculation the company may have walked away from the deal after executive chairman of the board Mark Chipman and Mayor Brian Bowman got into a public spat over the mayor's suggestions it was a back-room deal.
Today, Bowman said he couldn't be more pleased about the agreement.
"Well, it's huge. It's a significant investment. Almost certainly one of the biggest investments if not the biggest investment of its kind," he said. "Mixed use, having new residents downtown is something I campaigned on. And I would just like to thank True North for their continued investments in downtown Winnipeg."
Bowman was also asked if the deal means the tension between him and Mark Chipman has been lifted.
"The short answer is yes. We have been moving forward for some time," he said. "Winnipeggers, myself included, want to see continued investments in our downtown. And this obviously is a very exciting investment.
CentreVenture's president, Angela Mathieson, says the deal is great news for the city.
"We think there's going to be benefits not only to the immediate neighbourhood, but what's going to happen around it, I think, is going to be transformative," she said. "It just of a magnitude where it has that kind of impact."
The site, formerly the Carlton Inn, is adjacent to the RBC Convention Centre, which is undergoing extensive renovations and construction.
The city needs tax revenue from a new hotel on the land to pay for its share of the $180 million in upgrades to the convention centre.