Supply and Services Minister Claude Williams says the province is in serious negotiations with a potential buyer. (CBC)

The provincial government may have found a buyer for the historic Algonquin Hotel and golf resort in St. Andrews, according to the minister of supply and services.

The province is negotiating with a private company, said Claude Williams.

"We've identified some interested buyers, so there were people in and out looking at the facilities," Williams said.

"We've narrowed it down to one that is very interested, if we look at all of the criteria. So at this point in time we're in serious negotiation."

Williams declined to identify the potential buyer until there's an agreement.

The province, which owns the Algonquin, has been looking for a new operator since February, when Fairmont Raffles Hotels International announced it would no longer manage the resort after its contract expires on Dec. 31.

In June, the province hired a professional real estate firm that specializes in marketing, selling and leasing resorts to look at all options for the Algonquin's future.

The hotel needs about $20 million in upgrades.

During the peak season, the Algonquin employs 250 people and generates up to $6 million a year for the local economy.

But in 2009, the hotel and golf course lost a combined total of nearly $2 million.

The province leased the Tudor-style hotel in 1973 and bought it in 1984. It originally opened in 1889.

The Fairmont will continue to manage the resort until a new owner takes over, but the Fairmont label will be removed at the end of the year.