Apex Hotels put the property on the market last summer after it dropped plans to turn the 1840s structure into a boutique hotel.

The former headquarters of the city’s Port Authority has now been sold as a potential residential development to Alicydon Limited.

Angela Vickers, chief executive officer of Apex Hotels, told The Courier: “The decision to put Custom House on the market was not taken lightly.

“However, having considered various options following a rigorous market assessment we concluded that due to the increasing number of hotels coupled with the level of investment in our existing Dundee property it would not be viable to bring further accommodation to the market via the development of Custom House.

“We are pleased to have found a buyer committed to the retention, development and restoration of one of the city’s most historic and much-loved buildings.

“We continue to focus on developing Apex City Quay Hotel and Spa, which has seen £3.4 million invested over the past two years, with a £2.4m full bedroom refurbishment and, more recently, a £1m programme of works to refurbish public areas, restaurant and spa.”

Last month, a member of Dundee Civic Trust suggested Custom House should be lifted up and turned around by 90 degrees to make it easier to bring it back into use.