"Sulaiman al Fahim, the owner of Portsmouth Football Club, has sold the majority - 90 percent - of the club to Falcondrone Limited, a company owned by Saudi Arabian businessman Mr Ali al Faraj," a club statement said.
"Contracts have been signed between the parties today to enable funds to be released to pay the players and executive board on Tuesday."
Portsmouth's financial problems were exposed last week when the club admitted that players and executives had not been paid in the build-up to Saturday's 1-0 win at Wolverhampton Wanderers, their first points of the season after seven straight league defeats.
United Arab Emirates businessman Al Fahim said last week that he was looking to inject 50 million pounds into the south coast club as part of a refinancing deal to stabilise its precarious financial position.
However, on Sunday he confirmed that he would sell a majority stake to Al-Faraj, a property investor with a holding in petrochemical giant Saudi Basic Industries Corp (SABIC).
Al Fahim will retain a 10 percent stake in the club and will remain non executive chairman until the end of next season at least, the club said in its statement.
"The takeover will ensure Portsmouth Football Club's future is safe and will bring financial stability," a Portsmouth spokesman said. "Once the takeover is complete the club will undergo refinancing in order to grow and develop every part of the business."
Portsmouth's terrible start on the pitch, the worst by a top flight club for 79 years, came in the wake of Al Fahim's protracted takeover of the struggling club.
Their cause was not helped by the sale of several high-profile players in the last two transfer windows including England trio Jermain Defoe, Glenn Johnson and Peter Crouch.
