The College of Law has agreed a £200m sale of its legal education and training business to buyout house Montagu Private Equity, in a deal which marks the end of a strategic review by the charity's governors.

The College announced the sale today (17 April) at the same time as announcing that its charitable activities will be spun off into a separate entity to be known as The Legal Education Foundation.

With proceeds of the sale contributing to funds of more than £200m, the Foundation will be used to fund bursaries, scholarships and grants for future law students as well as other charitable purposes. It is understood that the fund will invest around £7m a year.

The law school, which will continue to be known as The College of Law, meanwhile will become part of Montagu's portfolio, with the private equity house working with governors of the College to lay out a strategic plan which will see the College expand within the UK and into other jurisdictions.

Montagu's acquisition will include all contractual commitments with law firms, as well as the brand and all its accreditations. Nigel Savage will continue as chief executive of the College, working alongside the existing management team. Montagu has also appointed Sir Tim Wilson, former vice chancellor of the University of Hertfordshire, as a non-executive director of the College's new board, which is currently being finalised.

The buyout house will also establish a College Scholarship Fund with a one-off investment of £2m to go towards the benefit of the College's students. Montagu will also place 2% of the business's share capital into the scholarship fund.

Confirmation of the conditional sale to Montagu comes after the College, which was incorporated as a charity by Royal Charter in 1975, announced a strategic review in September last year that was expected to lead to the sale of the training business.

Chairman of the College's governors Professor David Yates said: "Given the changing education environment, it was appropriate for the governors to undertake a major strategic review of the best way for the charity to meet this objective in the future. Montagu's investment will give The College of Law the freedom and support to continue to build its position as a leading professional legal education institution in the UK and internationally."

Chief executive Nigel Savage said: "The market for legal services is embracing new business models and a change in our ownership structure will enable us to access investment and expertise to take full advantage of the huge opportunities in the domestic and global legal education market."

The deal has generated roles for Allen & Overy, Linklaters and Maurice Turnor Gardner. The College turned to Hawkpoint Partners and A&O for advice, where global chairman of corporate Richard Cranfield led the charge. A&O private client spin-off Maurice Turnor Gardnor advised on spinning off the charity. Linklaters advised Montagu, with private equity co-head Richard Youle at the helm.

Ashurst corporate partner David Carter also took a role on the deal, advising the College of Law's management team. Tax partner Nick Gardner provided tax advice and senior associate Ruth Buchanan advised on employment issues.

Commenting on the news, universities and science minister David Willetts MP said: "This deal will ensure there is a well-funded charity and a successful international higher education business. The Legal Education Foundation will help to achieve fair access to the profession which is a key government goal.

"With the new funding invested in the College, it will be able to build its brand, take its trusted degrees to into other countries, and boost British education exports. It's an excellent outcome for everyone."

The sale of the College, one of the UK's top vocational law schools, comes after its closest rival BPP was in 2009 sold to US education provider Apollo Group and Carlyle for £303.5m.