LONDON (AP) -- The U.S. government said Tuesday it has agreed to sell its vast London Embassy building to a Qatari government-owned company.

The embassy said the State Department had signed a deal to sell the 600-room Chancery building to the Qatari Diar Real Estate Investment Co., the Gulf state's property investment fund.

The embassy announced plans last year to move from central London's Mayfair district to a new high-security building south of the River Thames.

The winner of a design competition is due to be announced next year, and officials hope the building will be completed by 2017.

The current embassy, a concrete-and-glass building by modernist architect Eero Saarinen, has been given protected status at the request of architectural guardian English Heritage, meaning its facade cannot be altered.

That restriction on redevelopment is likely to have reduced the sale price. The embassy did not disclose terms of the deal, but said it expects the sale of the Chancery and its other Mayfair buildings to pay for construction of the new embassy.

The move will end a U.S. presence on London's Grosvenor Square that goes back to the late 18th century, when future president John Adams was the first U.S. envoy to England.

Qatari Diar is a property investment company owned by the natural gas-rich state's sovereign wealth fund, the Qatar Investment Authority. It said in a statement that it will turn the building into a "mixed use" development. Qatari Diar added it has already invested 3 billion pounds ($4.9 billion) in the U.K. and could increase this to 5 billion pounds ($8.2 billion).

The company is also building a number of residential projects in Qatar and elsewhere in the Middle East.

Qatar Holding, another arm of the government fund, last month became the biggest shareholder in the company that owns much of London's Canary Wharf business district.

It also has stakes in major British businesses, including bank Barclays PLC, supermarket operator J. Sainsbury PLC and the London Stock Exchange.

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AP Business Writer Adam Schreck contributed to this report from Dubai, United Arab Emirates.