It is anticipated that the council will become the owners of Faray, Holm of Faray and Red Holm early in 2019.

The islands, located between Westray and Eday, were put up for sale by the Stewart Endowment Trust in August 2018.

The Trust disperses the majority of its funds locally, including to NHS Orkney, so it is anticipated that most of the money generated from the sale will stay in and benefit Orkney.

Orkney Islands Council’s leader James Stockan said: “The availability of this opportunity at a point when the council is actively looking at how best to maximise the resources available to them during financially challenging times, was too important to miss.

“There was significant local and national demand for these islands and it was vital that the council did all it could to secure them as a strategic development opportunity. There are a number of potential routes we could now take with them – some of which offer us the opportunity to generate income, some to make savings - and officers will be exploring these opportunities in due course.”

Iain Macdonald, chair of the Stewart Endowment Trust, added: “The Stewart Endowment Trustees offered these islands for sale in order to generate funds, which are used to support the work of local congregations, the Balfour Hospital and a couple of national charities, as defined by the Endowment’s founding document. We are delighted that they will be moving into the guardianship of the local authority, where they will remain a precious asset for the whole community for generations to come.”

The main island, Faray is around 300 acres, the Holm of Faray around 80 acres and the smallest of the three, Red Holm, is just five acres.