Chinese firm Jingye Group has said it will buy British Steel for a reported £70million - safeguarding 4,000 jobs at the company and as many as 20,000 in the supply chain, the Insolvency Service has confirmed.
The takeover ends uncertainty over the fate of the company, which was put into compulsory liquidation in May after Greybull Capital, which bought it for £1 from Tata Steel three years ago, failed to secure funding to continue its operations.
Jingye is a privately owned Chinese corporation founded and led by Li Ganpo a former senior Communist Party official who became a self-made industrial tycoon.
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Jingye also looks set to promise up to £300million in loans, indemnities and grants to back its plan to boost production at the firm's Scunthorpe plant by 10%.
British Steel, which makes products used in construction and rail, would give Jingye access to Europe's large infrastructure market.
News of the deal broke after staff were sent an email from Sam Woodward, a special manager from accountancy EY that is assisting the Official Receiver, reading: "As you are aware, Jingye has been undertaking accelerated due diligence for the last two weeks, and I am pleased to advise that it is progressing well.
"As many of you may know, we have been working towards a target date of exchanging contracts by 10 November 2019 and we are all working hard to keep to that timescale."
It added than an update was expected today, and the Insolvency Service has now confirmed a deal will go ahead.
In a statement, the Insolvency Service said: "The Official Receiver and Special Managers from EY can confirm that a sales contract has been entered into with Jingye Steel (UK) Ltd and Jingye Steel (UK) Holding Ltd (together, Jingye), to acquire the business and assets of British Steel Limited (BSL), including the steelworks at Scunthorpe, UK mills and shares of FN Steel BV, British Steel France Rail SAS and TSP Engineering.
"The sale also includes the shares owned by BSL in Redcar Bulk Terminal Limited.
"Completion of the contract is conditional on a number of matters, including gaining the necessary regulatory approvals. The parties are working together to conclude a sale as soon as reasonably practicable.
"The business will continue to trade as normal during the period between exchange and completion. Support from employees, suppliers and customers since the liquidation has been a critical factor in achieving this outcome."
