Qatari Diar, the investment arm of Qatar's Royal Family which last year took over Harrods, and Delancey will work alongside Triathlon Homes who will manage the affordable housing in the Village which lies adjacent to the Olympic Park.

The housing is set to create a new neighbourhood for east London complete with 2,818 new homes, education and healthcare facilities, new parklands, public squares and open space.

"This deal will deliver a significant return to the public purse and a first-class owner for the Olympic Village," said Olympic Delivery Authority (ODA) chief executive Dennis Hone.

"It secures two leading property investors with the experience and expertise needed to make the Village one of the strongest legacies from the Games."

Triathlon Homes have already purchased 1,379 of the new 2,818 homes, which will become affordable housing, with Delancey and Qatari Diar now set to acquire the ODA's interests in the remaining 1,439 homes which will become private housing along with six adjacent future development plots with the potential for a further 2,000 new homes.

Delancey and Qatari Diar will invest around £557 million ($906 million/€636 million) for the purchase and long-term management of the Olympic Village while the deal also includes arrangements to provide a future profit-share for the public sector.

The majority of the 1,439 private homes in the Village are to be let on a rental basis, instead of being sold, with the ownership remaining with the Delancey and Qatari Diar joint venture.

This will create the first UK private sector residential fund of over 1,000 homes to be owned and directly managed as an investment.

Mohammed bin Ali Al Hedfa, group chief executive of Qatari Diar, said: "Qatari Diar is delighted to have signed this agreement with the Olympic Delivery Authority, in a joint venture with Delancey.

"We are looking forward to working with all those involved to ensure that the Olympic Village becomes a fitting legacy to the London 2012 Olympics, and one that will benefit the local communities."

Jamie Ritblat, chief executive of Delancey, said: "This acquisition reflects the first truly great residential investment opportunity in the UK; offering the chance to break the mould and create a sustainable leasing model to provide first class accommodation for those who see the chance to rent long-term, as the way forward.

"We are enthusiastic about working in close partnership with the ODA, Olympic Park Legacy Company (OPLC), Triathlon, London Borough of Newham, and the other key stakeholders, to deliver a strong community, and a legacy which will make this and the wider Stratford story, one which we can all be proud of, not just within London but on the global stage as well."

Delancey is a specialist real estate investment company with a property portfolio that covers retail, residential and commercial developments across London and the UK.

Meanwhile Qatari Diar is a real estate investor and developer owned wholly by the Qatar Investment Authority that has been involved in landmark developments across Europe and the Middle East.

The appointment of the Delancey and Qatari Diar joint venture follows an open investment process launched in October 2010 which saw submissions from leading property developers across the UK, mainland Europe, North America and Asia.

The ODA will now work closely with Delancey and Qatari Diar together with Triathlon Homes to develop the long-term plans for the Village.

"We look forward to working with Delancey and Qatari Diar to achieve the fantastic potential the Olympic Village offers," added Elliot Lipton, the executive director at Triathlon Homes.

"Alongside Delancey and Qatari Diar, we will continue to work with the ODA to ensure the delivery of top quality homes, which will set exemplary design and sustainability standards, ready for residents to move into from late 2013."

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