The former council house in Sutton Coldfield is set for the biggest transformation in its 150-year history with a £10 million mixed-use scheme to start within months.

The redundant municipal building, which dates back to 1865, is set to be refurbished after it was bought by city development firm Gethar Ventures.

The firm, led by well-known businessman Anthony McCourt, is planning to transform the area with more than 50 luxury apartments and two restaurants.

Birmingham City Council put the building on the market in 2012 to trim its administrative buildings budget.

The sale has been welcomed as a means of rejuvenating the 'old town' part of Sutton Coldfield.

Mr McCourt told the Post that Gethar had won the bid, despite interest from a number of other parties, and said the homes at the locally listed council house would be among the most spacious apartments in the town.

He said: "Sutton Coldfield is a major gem of this city and it is about time some serious money gets invested to breathe some life into these buildings.

"The building is locally listed so we won't be changing the exterior – but it is a beautiful building anyway, so I don't want it to look any different. It just needs a good clean.

"But there is a lot of internal work that needs doing. The building hasn't had a lot of love and attention in recent years and it needs it. It will be a complete gutting and renovation.

"These are going to be very exclusive residences. You are talking about luxury apartments, a lot of duplexes, and about 1,600 sq ft of space on average," he added.

The first phase, to refurbish the council house itself, will see the inside of the building gutted to create 18 giant apartments.

A total of £4 million will be invested in this phase, with work to start in the autumn and expected to complete by summer 2015.

Construction will then begin on the second phase, costing £6 million, which will see work take place on the land next to the council house, with plans to create two restaurants and 35 apartments.

A planning application is being drawn up, but new government guidelines – permitted development rights – mean that converting disused offices for residential use often does not require permission.

The new rules have already accelerated the planning process for the One Hagley Road scheme at Five Ways in Edgbaston.

Mr McCourt said: "I think Sutton Coldfield's best days are ahead of it. Some of the key national brands need to come into Sutton but it's making good progress.

"Fundamentally, there is a great close-knit community and it is a major commuter belt."

The work will mean a new future for the building which was first constructed as a hotel to serve the nearby train station 149 years ago.

The building is connected to Sutton Town Hall, which is not included in the sale, and has recently been used as a register office.

Originally known as the Royal Hotel, but commonly referred to as the Railway Hotel, it was bought by Lieutenant Colonel Wilkinson who transformed it into a sanatorium – a facility used to treat chronic diseases – and health institution.

In the early 1900s, it was sold to the Borough of Sutton and became synonymous with the local authority over time.

Anne Underwood, city councillor for the Sutton Four Oaks ward, said the building was in dire need of renovation.

She said: "If the plans come off the way the developer wants then it will be a welcome addition to the town.

"The building itself is no longer fit for purpose. I reluctantly moved the constituency office into there and I had to have the place fumigated. It was horrible, and the best use of the building is to have it renovated for apartments.

"Anything that rejuvenates that area, but at the same time respecting the heritage, is okay by me."

Sutton Coldfield resident Philip Parkin said he hoped the work could open up the "old town" area which was in need of investment.

Mr Parkin, who recently stood down as a city councillor for the Sutton Trinity ward, said: "I think the old town is one of Sutton Coldfield's best assets but it has always been closed off.

"I always thought the council house would be best used as a hotel or conference facility – that would have been my ideal choice – but I don't think that is likely.

"But anything that can open up that building into the rest of Sutton – like bringing restaurants in and getting the public through – is a good thing."

Carl Holloway, of Holloway Foo Architects, is currently drawing up plans for the wider scheme, with Orb Marketing and Gleeds also part of the team.

This represents Gethar's first residential project having already commenced development with two city centre hotel sites – the Snobs building in Birmingham and one in Liverpool.

Mr McCourt said Gethar has a further two residential opportunities currently in lawyers' hands.