UK bookmaker Betfred has been chosen to buy the Tote. Betfred is paying £265 million in an auction process that began in November.
Horse racing will receive £90 million from the sale and £90 million will go to the taxpayer.
The BBC reports Betfred will take over the Tote's monopoly on pool betting at 60 UK racecourses and online, and will rebrand its 517 High Street outlets.
As part of the deal, Betfred will keep exclusive control of a pool betting system on UK racecourses for seven years.
In return, it is committed to paying the racing industry £11 million to March 2012, with payments of £9 million per year for the next six years.
The Tote specialises in pool betting. It was set up 83 years ago by Winston Churchill to provide a safe haven for punters.
The sale price is about a third lower than the £400 million first offered by a consortium of racecourse owners in 2007, which was turned down by the Labour government.
An earlier sale attempt ended in 2006 after the European Commission said that the price was too low and tantamount to state aid.