Sports Direct plans to buy the House of Fraser building in Glasgow in a £95m deal.
The firm has promised to turn the luxury department store into the “Harrods of the North”, safeguarding 800 jobs.
The store, which is owned by a pension fund administered by Glasgow City Council, will continue to trade as Frasers.
Sports Direct hope to complete the full deal by 2020.
Glasgow City Council leader Susan Aitken described it as a “vote of confidence” in the city.
Sports Direct bought Frasers out of administration in August, acquiring 59 stores throughout the UK.
The billionaire founder of the company, Mike Ashley, later paid a surprise visit to the store on Glasgow’s Buchanan Street.
Michael Murray, head of elevation for the new owners, said: “We are overwhelmed and proud to own such an iconic destination.”
He added that acquiring the building “enables us to elevate and invest in the store in order to partner with a broad range of luxury brands in future. This is fantastic news for all parties.”
The building is owned by the Strathclyde Pension Fund, which is administered by Glasgow City Council.
It is listed and extends to about 350,000 sq ft arranged over multiple floors.
Susan Aitken, leader of Glasgow City Council, said: “Glasgow is the country’s number one retail centre after London – and the House of Fraser store on Buchanan Street is a city institution, much loved by generations of Glaswegians.
“A major investment on this kind of scale is a clear vote of confidence in Glasgow; and credit must also go to hundreds of Fraser’s staff, who are absolutely integral to the business’ success and its enduring popularity with city shoppers.”