New flats for 70 students have been created in a building formerly used by legal professionals.
Crosstrend House, in Newport, Lincoln, has been sold to Bail and Wharf (Developments) Limited.
The building, which used to house the Crown Prosecution Service, has been converted into student accommodation.
It has been leased to Bishop Grosseteste University College located nearby, on a 21 year agreement.
Stephen Deville, director of resources at Bishop Grosseteste University College, said: "Crosstrend House will be an excellent addition to our estate, increasing the number of rooms we can offer our students from around 200 to around 270.
"We promise to find accommodation for all our first-year students and it is becoming increasingly difficult to find suitable student rooms in uphill Lincoln.
"The building is fully converted and looking very smart.
"We are really pleased with this agreement and to be able to get a property like this in uphill Lincoln is a real coup for us as it is convenient to get to the campus and the city centre.
"This lease arrangement will give us more capacity and should prove popular with our students."
The majority of the accommodation is en-suite and the first students are expected to move in on September 10.
Richard Standley, of Bail and Wharf, said: "Bail and Wharf Developments are pleased to have secured Crosstrend House and to be able to develop a high specification student accommodation building."
"We are enabling the college to benefit from high quality accommodation for the students of Bishop Grosseteste and at the same time bringing an important building back into good use."
The sale of the property was completed by Hodgson Elkington LLP on behalf of county-based Howtin Investments Limited.
Dan Race, of Hodgson Elkington, believes there will be no lack of demand for the new student accommodation.
"This is a sale of a landmark building in uphill Lincoln and will involve substantial investment by the purchasers in conversion works," he said.
"There is a lot of dedicated student accommodation around the University area but very little available for Bishop Grosseteste students.
"We believe there will be strong demand for this and that it will prove to be a very good use of the building."