The iconic building in Mostyn Street, first built in 1860, has been bought by Tony Forrest and his wife Angela Butler.

The couple, who will relocate from Sydney, plan to run the five-star accommodation business but are seeking an ambitious operator for a new restaurant leasehold.

“We plan some minor internal modifications and will offer a restaurant leasehold to an operator with similar vision to our own,” Mr Forrest said.

 “With the size of the restaurant, it could be a good opportunity for someone wanting their first restaurant, who has a bit of good experience and who knows the town and wants to put their stamp on it.

“The successful person will be able to name it.

"We will just run the accommodation side, along with our other businesses in the area."

Mr Forrest, a former head of Channel 7 in Sydney and chief executive of Movie Network Channels, was previously a partner in Forest's Restaurant in Castlemaine and owned the Metropolitan in Bendigo for 20 years.

He said he was looking forward to moving back.

“Castlemaine has nearly doubled in size over the last 20 years, and the restaurant offerings have come a long way in that time,” he said.

“We have spent a lot of time with the family in Newstead and we know Castlemaine very well.

“I was just driving along and I saw a for sale sign up and that the auction has passed, so I went in and knocked on the door.

“The two owners are lovely people and there was a lot of to-ing and fro-ing and we got it all sorted on Friday.

"Inside has been lovingly restored by the current owners so we won't be changing much.

 “We are very enthusiastic about coming back.”

The restaurant will close on May 12 ahead of the settlement sate on May 26.

It will reopen under new ownership on June 8.

Agent John Castran said there was stiff competition for the property.

“We had two groups interested right to the very end, they were both fantastic operators who would be good for Castlemaine and Tony won on the day.”