London City Airport is to be sold to a consortium led by US insurer AIG for an undisclosed sum.
The number of people using the airport is rising
The Docklands airport, opened in 1987, was put up for sale by its Irish owner Dermot Desmond in May, with reports suggesting it could be sold for £750m.
GE Infrastructure - part of industrial giant GE - and investment bank Credit Suisse are also backing the deal, which must be approved by EU regulators.
Nearly two million passengers used the airport last year.
The airport targets business travellers, with its proximity to the Docklands making it the airport of choice for many bosses working there.
It revealed plans earlier this year to boost passenger numbers to three and a half million by 2015 and eight million by 2030.
New routes launched this year include Milan, Stuttgart and Madrid.
The airport is a favourite of many people working in Docklands
Mr Desmond bought the airport for £23.5m in 1995 after it had struggled to build business in its early years.
London City Airport said the sale price reflected the new owners' faith in its growth potential.
"London City Airport understands that its new owners plan to work closely with the existing airport management team to maximise the development and future value of the airport," it said.
It has enjoyed strong growth in the past two years with monthly passenger figures hitting a record of more than 220,000 in June.
London's successful bid to stage the 2012 Olympics has increased the value of the airport.
The event is expected to significantly boost traffic numbers and raise the airport's profile overseas.
Several consortia were interested in buying the airport including one led by British construction company Balfour Beatty.