Hugh Hefner's Playboy mansion in Los Angeles will soon have a new owner — the billionaire next-door neighbour.

Representatives for Playboy Enterprises confirmed Monday that the 20,000-square-foot property is in escrow for a pending sale.

The mansion is located between the UCLA campus and Beverly Hills, just west of downtown Los Angeles.

The buyer is believed to be Daren Metropoulos, who along with his father and brother run investment firm Metropoulos & Co. Metropoulos is a former co-CEO of brewer Pabst Brewing Company and the current owner of Hostess Brands, the maker of Twinkies, which his company bought in 2013.

Metropoulos bought the property next door to the mansion from Playboy for $18 million US in 2009, and has long wanted to expand his presence.

The deal for the Gothic Tudor-style mansion built in 1927 includes allowing Hefner to stay at the residence for the rest of his life, as a tenant.

"If the purchase closes and at some point after Mr. Hefner's tenancy ends, Mr. Metropoulos intends to reconnect the two estates, ultimately returning the combined almost three-hectare compound to the original vision executed by noted architect Arthur R. Kelly and its first owner, Arthur Letts, Jr., the department store heir whose father conceived and developed Holmby Hills when it was the Wolfskill Ranch," Metropoulos & Co., said in a statement.

"In the meantime," the statement continued, "he is pleased to continue to have Mr. Hefner as his neighbour and feels fortunate and privileged for the opportunity to serve as a steward of this historic property."

Both sides have declined to offer the sale price, but in January, the entire property was listed for as much as $200 million US. Local real estate agents said at the time that appeared ridiculously overpriced. A nearby property sold last year for $59 million.

The mansion sits on more than two hectares and has 29 rooms, including a game house, home theatre, wine cellar, gym, tennis court, swimming pool — and the famous grotto — and comes with a four-bedroom guest house.

With files from The Associated Press