Dragons are to return to private ownership after a takeover deal for the Newport-based regional team was agreed.

However, before Friday's deadline a heads of terms agreement was reached with a consortium led by chairman David Buttress.

A return to private ownership had been a condition of the new six-year deal signed between the regions and WRU in March.

The new deal will allow Dragons RFC to take back ownership of their Rodney Parade home in the centre of Newport.

Buttress said he was "delighted" to have agreed the deal.

"This is a momentous day in our club's history and the start of an exciting new chapter for us all at Rodney Parade and for rugby right across Gwent," he said.

"It is an enormous responsibility to become custodians of this club.

"Our ambition is aligned with our supporters, and we will continue to build a true family club and work with local stakeholders to help deliver professional sport and sustainable long-term growth for the area."

Newport Gwent Dragons were formed as part of Welsh top-tier rugby's transition from a club to regional structure 20 years ago.

However financial difficulties saw the WRU step in in the summer of 2017.

The governing body increased its 50% share in a takeover that included the nine-acre Rodney Parade site and saw the team rebranded simply as 'Dragons'.

However WRU interim chief executive Nigel Walker said a return to private ownership was "hugely positive" for the whole of Welsh rugby.

"It was a vital piece in the jigsaw for our new long-term, six-year agreement for the professional game in Wales and to bring about the sustainability and success it demands," he said.

"Credit must go to David and his fellow investors for their passion and commitment to Dragons RFC.

"We know these are difficult times for the professional game globally, but this news today puts the Dragons in a strong position to thrive in the years ahead."

Cwmbran-born former Just Eat UK chief executive Buttress was appointed chairman following the WRU takeover in 2017 and he was instrumental in the name being amended to Dragons RFC.

However he has previously said he felt there has been an "unhealthy focus" on the national teams within the WRU and the community, women's and regional game had been neglected.

Dragons - like their counterparts Cardiff, Scarlets and Ospreys - have continued to be dogged by financial issues with the impact of the coronavirus pandemic having a major impact on cashflow.

The six-year deal agreed by the Professional Rugby Board, which represents all four regions and the WRU, will see each region's funding reduced by almost £2m each.

Budgets will be slashed to £5.2m for 2023-24 season and reducing further to £4.5m the following season as the game in Wales looks to find a sound financial footing.

'Day for optimism'

Newly-appointed WRU chair Richard Collier-Keywood said: "We have reached a deal that has been fashioned in the best interests of all involved.

"It will see future sustainability and success at the Dragons and will help secure the long-term future of the professional game in Wales.

"This is a day for celebration and optimism in Welsh rugby."

It is not yet known how the takeover will impact the other two clubs that also use Rodney Parade.

Second-tier Newport RFC moved out of the venue clubhouse when the WRU took over and have staged many of their games elsewhere in the city.

League Two football club Newport County have also been WRU tenants at Rodney Parade and if they are to continue playing there, EFL rules state they must have priority over fixture dates.