The Sports World parent bought the stores, the brand and its website for £23.8m in a deal that will protect 550 jobs in the UK, including its warehouse.
But the agreement is a worse-than-expected outcome for JJB staff as Sports Direct was reportedly hoping to safeguard up to 1,500 jobs and buy up to 60 stores.
However, David McCorquodale, corporate finance partner at KPMG, who led the sales process, said the level of cash and further operational restructuring required to rescue a more substantial part of the business was too much risk for most interested parties.
Only four Scottish stores, at Glasgow Silverburn, Airdrie, Cumbernauld, and Elgin, will be sold, saving 50 jobs. Around 25 more Scottish shops, employing hundreds of staff, will be closed.
Sports Direct recently agreed a joint venture deal to distribute merchandise for Rangers Football Club. This superseded a deal that Rangers had held with JJB since 2006.
JJB's collapse will serve as another blow to the high street after recent high-profile casualties including video games retailer Game Group, fashion chain Peacocks, outdoor specialist Blacks Leisure and Clinton Cards.
The JJB name will vanish from the high street as Sports Direct intends to convert all stores as part of the deal, in which it also acquired all of the company's stock and the Slazenger Golf brand.
Brian Green, David Costley-Wood and Richard Fleming, partners of KPMG LLP, were appointed as administrators of the company.
KPMG said the net proceeds of the sale will be used to repay the company's outstanding debt to its lender and other secured creditors and it confirmed that shareholders interests would be wiped out.
The group had already warned investors - who include the Bill and Melinda Gates Foundation - that they were likely to see their stakes lost under any rescue deal.
Mr Fleming, UK head of restructuring at KPMG, said it was unfortunate that a buyer could only be found for 20 stores.
Staff made redundant as a result of store closures have had their arrears of wages and holiday entitlements paid in full, he added.
Wigan-based JJB put itself up for sale at the end of last month after failing to secure the funds needed to overhaul its stores.
JJB's slide into administration represents a sad end to a once proud company which traces its roots back nearly a century.
The original store was established by JJ Broughton in the early 1900s and was bought by JJ Braddock and then JJ Bradburn.
Its dramatic rise and fall began when former Blackburn Rovers footballer and Wigan Athletic owner Dave Whelan bought the store in Wigan in 1971.
Mr Whelan, who had previously sold a discount store business to Morrisons founder Sir Ken Morrison, maintained the JJB name and grew the business to 120 stores in 1994 when the company was floated on the stock exchange.
The company became the biggest sports retailer in the UK in 1998 when it bought Sport Division from Sir Tom Hunter for around £290m.
By 2007, it had more than 400 stores and also operated 40 sports clubs and a handful of indoor football centres.
That year, Mr Whelan sold his family's holding for £190m to a joint venture formed by Icelandic financial group Exista and Chris Ronnie, who previously worked at Umbro and Sports World owner Sports Direct.
Shares at around that point were worth £10 a piece but following successive fundraising attempts, remaining investors - including Microsoft magnate Bill Gates - have now seen their holdings wiped out.
The group has been hit hard by the squeeze on consumer spending triggered by the financial crisis and the expansion of rivals Sports Direct and JD Sports.
By late 2008 it was in a battle for survival in a remarkable turnaround in fortunes after Mike Ashley was reportedly told by Mr Whelan in 2000: "There's a club in the north, son, and you're not part of it."
The Newcastle United owner responded with an aggressive campaign of promotions and store openings as Sports Direct became the UK's leading sports retailer by turnover and operating profit.
By the end of 2008, JJB had embarked on a major restructuring and refinancing. Its two loss-making leisure footwear brands, OSC and Qube, were placed into administration and the company disposed of its fitness clubs to Mr Whelan's DW Sports for £83.4m.
Recent years have seen it embark on a series of fundraisings from shareholders and more than halve its store estate.
JJB secured its most recent lifeline four months ago when it landed £20m from US retailer Dick's Sporting Goods and a further £10m from existing shareholders.
It earmarked £20m of the most recent funding on converting 60 of its most important stores in 2012 and 2013 into a new format which during trials produced much-improved sales and margins.
More dire trading despite the UK's summer of sport left the stricken firm asking shareholders for another cash injection, but this time they ran out of patience, finally forcing the group to throw in the towel and put itself up for sale.