Dragons' Den cast member Michael Wekerle put down a deposit to buy the Spadina Avenue music haunt, and El Mocambo has accepted it.
The purchase is set to close by middle of January 2015, according to Wekerle.
The El Mocambo was once a mainstay of bands visiting Toronto, with artists as varied as Blondie, U2, Fats Domino and the Rolling Stones taking the stage there over the years.
The venue will reportedly continue as a music venue in future.
The venue's multicoloured palm tree sign, which has stood tall over Spadina for decades, was put on the auction site eBay in October and was reportedly sold. But it has not been taken down as of yet.
There is a benefit concert on Thursday, at which Wekerle will be handed the keys to the building on stage.
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