Hull City have been taken over by Paul Duffen after he assumed control of the Championship club from Adam Pearson.
Pearson will stay on as a board member but said he sold the Championship side to Duffen as they needed more financial backing to aid their development.
"If we are not able to invest in the club then ultimately we will fall back to where it took so long to escape from," Pearson told the club's website.
"We've come too far to allow this club to slip back into the lower reaches."
He added: "This why I feel it is now right to relinquish control and introduce a more structured traditional style of football club board to Hull.
I believe that manager Phil Brown is the right man to deliver the success on the pitch
Hull chairman Paul Duffen
Hull narrowly avoided relegation last season after Phil Brown became boss and Pearson says he believes Duffen is the right man to help the club avoid a similar threat next season.
"I have been very careful in the choice of new principal and feel Paul Duffen and his investment associates are right for the future of this club at this stage of its development.
"It became acutely clear last season that on my own I had taken the club as far as I could and really needed the support of a financially stronger board.
"We now have that board in place to take the club forward."
Duffen says legal papers were signed "some weeks ago" and that he approved the decision to extend Brown's tenure as manager of the club.
"I believe that Phil is the right man to deliver the success on the pitch that the fans deserve to reward their dedication and loyalty," said Duffen.
"He has my complete support."
He added: "With a lot of hard work and a bit of luck I believe that Hull City can become established as a force to be reckoned with in English football. I relish the challenge."