Pohuenui in Pelorus Sound - one of the most productive farming properties in the South Island in the 1920s - has been sold to three overseas investors for $8.39 million.

The 2300ha "island" and homestead has been bought by Gunter Thiel and Andreas Fellmann, both of Luxembourg, and Farhad Vladi of Germany.

Pohuenui, which has a government valuation of $1.16 million, was owned by Ingrid Kathman-Broring of Switzerland. It features a 520ha sheep farm cleared from regenerating bush about 1990, a five-bedroom homestead, a three-bedroom cottage, a 24-bed bunkroom and extensive bush.

Mr Thiel is principal of logistics company Thiel Logistik, Mr Fellmann is a business consultant and Mr Vladi is a marketer of private islands.

When it went on the market in 2000, priced at just under $10 million, real estate agents said about 20 serious expressions of interest came from the United States, Germany, France, Australia and South Africa.

New Zealanders had also shown substantial interest in investing in the island, in the northwest quadrant of the head of the Marlborough Sounds.

Although described as an island, Pohuenui is connected to the mainland by a narrow strip of land, but there is no road access.

The property carries more than 4000 sheep and cattle, and 100ha of land is managed by the Conservation Department.

The island is near Maude Island, a natural sanctuary for the kakapo, and Duffers Reef, a king cormorant colony.