Liberty's nightclub in Edgbaston has been sold as part of a £27.2 million deal by bar and nightclub operator Luminar.
Luminar, which owns The Jam House in the Jewellery Quarter, has agreed to the sale of 49 unbranded nightclubs from its enterprise division to a management team.
Advised by Wragge & Co, the deal was backed by Close Brothers Private Equity and led by the division's managing director Tim Roberts and Craig Grant - the finance director of the company set up to bid for the division.
The new business will be renamed CanDu Entertainment Group and will comprise of 29 nightclubs and 20 high street bars. It will be the UK's second largest nightclub group. The nightclubs and high street bars are located predominantly in regional towns.
In the year to February 27, the division generated sales of £44.1 million.
Close Brothers said the funding will be used to invest across the CanDu estate, including the repositioning of some of the high street bars, as well as increasing local marketing initiatives.
In addition, the private equity firm will be actively looking at acquisitions for the nightclub estate.
Mr Roberts, new chief executive of CanDu, said: "The UK nightclub market is currently unconsolidated with a significant number of nightclubs in private ownership.
"We believe this presents opportunities to grow the CanDu estate, in particular, using the management buyout as a platform to develop and grow a strong national nightclub business."
Maurice Dwyer, head of Private Equity at Wragges, said the deal with Luminar had been on the table for about a year and had prompted the reorganisation of the group's bar divisions.
He said: " It wasn't a straightforward deal, especially making sure the management team was right, but both sides are very happy with the outcome."
Luminar plans to use the proceeds of the sale to strengthen its balance sheet and to develop its core nightclub business.
The clubs being sold are among 63 that Luminar had earmarked for disposal after identifying them as non-core to the club estate.
It has already sold 12 of the 63 and intends to dispose of another two separately.
The group plans to focus on the 125 other clubs in the nightclub portfolio, which are known under the Oceana, Lava Ignite, Liquid and Life brands.
Luminar revealed in May that its pretax losses had widened to £14 million from a deficit of £11 million the year before, during what it described as a " year of transition".
The Luton-based group is in the middle of a strategic overhaul after experiencing difficult trading over the last couple of years.
Luminar said trading was showing signs of stabilising, but there was still room for improvement.
Meanwhile The Jam House, which was confirmed safe from restructuring plans last month, has been awarded Most Outstanding Improvement Award by the group. It recognises a 400 per cent increase in its operating profit over its previous year's figures - a record for the group's 300 bars, clubs and music venues.