Whanganui District Council has secured additional accommodation for incoming international pilot students in the form of the Collegiate Motor Inn.
It means the Oaks Restaurant, Cafe and Bar, which employs 20 staff, will close at the end of March.
The council's Holdings company has purchased the Liverpool St property, which will soon be home to 75 New Zealand International Commercial Pilot Academy (NZICPA) students.
It would not reveal how much it paid and had a confidentiality agreement with vendor Mike Hos.
The students are cadets of Indian airline IndiGo and will arrive in Whanganui in the middle of the year for their studies.
Whanganui District Council Holdings chairwoman Annette Main was pleased to get the deal completed and said it's a good location for the students.
"We were a little worried about the time frame and to have something that is already in existence, it certainly means we can meet the time frame for those extra students," she said.
"It was an opportunity that arose at a time where we started thinking if we're going to build, we need to start building right now.
"That's not easy either when there's a lot of pressure on the building industry here at the moment, so it was very opportune.
"The owner wanted to sell and we needed a facility like that."
Pokies spending almost breaks decade high in 2019
New mural adds to beautification of Whanganui's Durie Hill suburb
Cricket: Central Districts Under 15 unbeaten ahead of facing Christchurch XI
Last year WDC Holdings purchased the former Nazareth Rest Home on St Johns Hill, and has almost completed work to transform the location into accommodation for the first lot of international students due to arrive in the coming weeks.
Main said the soon-to-be student accommodation was an opportunity for Whanganui to grow its international student reputation.
"The international education market is big for New Zealand and we're seen as a very desirable country, and I don't see why Whanganui shouldn't be taking advantage of that.
"We certainly don't have the number of international students that we used to have, say coming through UCOL, so this is a way of us securing them in Whanganui."
Mayor Hamish McDouall said expansion into the international market by NZICPA had been incredible.
"That more accommodation is required is testament to its success as a contributor to our local and regional economy.
"The purchase of the Collegiate Motor Inn means there will be no impact on the rental housing market from these new international students living in Whanganui, and the demand for housing our region is experiencing will not be exacerbated."
The inn, also known as the Quality Inn Collegiate, has been owned by Hos for almost a decade.
He said the right opportunity to move on presented itself through a sale to WDC Holdings.
"I think you're always looking for an exit strategy and have it in the back of your mind, but we weren't targeting them at all.
"An opportunity presented itself so we investigated it."
The sale of the site also includes Oaks Restaurant, Cafe and Bar which employs 20 staff.
Hos said supporting his staff over the coming months was his number one priority.
"We're closing down completely at the end of March and we're in the process of talking to future employers and deploying the staff around town because I've got 20 trained staff ready to go," he said.
"The biggest complaint I hear in the industry is people can't get reliable staff, and I've got reliable staff trained and ready to slot in so I would be very surprised if we couldn't house pretty much all of them."
Main said WDC Holdings hadn't yet discussed what will happen to The Oaks.
"We've got to cater for those students so all of their contracts probably have catered breakfast, lunch and dinner.
"Whether we use [The Oaks] for that purpose or not, we haven't discussed the details."
Main said she has contacted Whanganui & Partners to inquire about support being offered to affected staff.
In a statement, Whanganui & Partners chief executive Mark Ward confirmed assistance would be offered.
"We are excited about the growth at the NZICPA and what this next step signifies in terms of its success.
"We will look at how we can assist any Quality Inn Collegiate hotel staff who may wish to reposition themselves in our growing economy."
The sale of the Liverpool St property is unconditional with a settlement date in early April.
Hos said a confidentiality agreement is in place between the two parties and neither disclosed the amount the property was sold for.