The El Mocambo was slated to close its doors for good on Thursday night, until a new investor stepped forward to buy the legendary music venue.

Dragons' Den cast member Michael Wekerle put down a deposit to buy the Spadina Avenue music haunt, and El Mocambo has accepted it.

The $3.78-million purchase is set to close by middle of January 2015, according to Wekerle.

"I made the decision within a week and bought it within a day," Wekerle told CBC News. 

The El Mocambo was once a mainstay of bands visiting Toronto, with artists as varied as Blondie, U2, Fats Domino and the Rolling Stones taking the stage over the years.

The venue will reportedly continue as a music venue in future.

Historic El Mocambo

The El Mocambo has been a landmark for classic rock and New Wave music fans over the years. (Toronto Archives)

The venue's multicoloured palm tree sign, which has stood tall over Spadina for decades, was put on the auction site eBay in October and was reportedly sold. But it has not been taken down as of yet. 

There is a benefit concert on Thursday, at which Wekerle will be handed the keys to the building on stage.