Seven hectares of the 32-hectare Southeast False Creek development site will be transformed into the Olympic Village during the 2010 Winter Games. Seven hectares of the 32-hectare Southeast False Creek development site will be transformed into the Olympic Village during the 2010 Winter Games. (CBC)

The City of Vancouver has taken over $700 million in financing from a New York-based hedge fund to complete the construction of the troubled Olympic Village project.

The deal, which was announced by city manager Penny Ballem during an update on the project to council Wednesday morning, means the city will be responsible for the complete financing of the development.

The nearly billion-dollar condominium development will house athletes during the 2010 Winter Games and then be sold off as individual units.

The project ran into trouble in October when the Fortress Investment Group told the city it was unable to provide the financing for Millennium Developments because of the global financial crisis.

The city has since been negotiating with Fortress to secure the completion of the project in time for the Games in February 2010.

The city has always retained ownership of the land on which the development sits. It also owns the commercial real estate underneath the condominium units.

The city recently announced it may have to reduce the number of social housing units planned for the project in order to cut costs.