Several people came forward after it failed to sell at auction in November, according to estate agent Tom Snook.
The unknown buyer tabled the highest bid in a round of ‘best and final offers’.
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Mr Snook, of Pantera Properties, said the sale completed just before Christmas.
He added: “There was a lot of interest following the publicity about the auction. We had several offers and took the best. Hopefully this means it will be brought back into use soon.”
Built in 1808, the Old Town Hall - which also housed Sheffield’s courts - on Castle Street has not been used for 25 years.
It was bought by Sheffield developer Efe Omu in January 2020 for £750,000.
He obtained planning permission for 12 apartments, 12 hotel rooms, a roof terrace and commercial use on the ground floor and basement. He started the mammoth task of repairing the water-damaged and vandalised building.
But he was unable to meet repayment deadlines due to lockdown and fell into default with lenders.
Land Registry records show that by September 2020 restrictions had been introduced preventing the sale of the building without the written consent of lenders TFG Capital, in Doncaster, and Huddle SPV 4, in Leeds.
Mr Omu’s company, Aestrom OTH Ltd, collapsed and responsibility for the building passed to Sheffield insolvency company Wilson Field.
The Grade II-listed Old Town Hall was put up for sale last summer and attracted several offers.
But, in a surprise move, Wilson Field put it up for auction in November with a reserve of £750,000 - a big drop on its original £1.35m asking price.
The project was thrown into disarray when it failed to attract any bids. It remained on the market with Pantera Properties for £750,000.
Mr Snook said the publicity led to several offers and the sale.
In December, Coun Mazher Iqbal, said: “We have ambitious plans for Castlegate and have recently secured £20m funding from the Government’s Levelling Up Fund to transform the area. We will now be liaising with partners to consider how we can work together to secure the future of this historic building.”