The Marshall Islands government has bought a hotel in Majuro with the aim of turning it into a campus for the University of the South Pacific.
The government made a US$2 million down payment on a $3.8 million price tag for the 36-room Long Island Hotel.
The move reduces the available hotel rooms in Majuro to about 150, with most of those at the other government-owned Marshall Islands Resort.
Government leaders have discussed the development of a north-Pacific campus for USP in Majuro for many years.
Currently, USP operates a college preparatory "foundation" program as well as an extension centre that provides both classroom and distance learning options, including a master's program.
The government used funds from the Marshall Islands Marine Resources Authority for the down payment, and the balance of $1.8 million will reportedly be funded by Taiwan.
Last year, USP officials evaluated the site and recommended modifications.
It's the third major private sector facility to be purchased by government over the past two decades.