A popular arts venue is to reopen under new management after the University of St Andrews agreed on a rescue package to save it.

Scotland's oldest university has signed a 25 year lease on the Byre and will operate it as a theatre, educational resource, general arts venue and music centre.

The theatre, which is owned by Fife Council, closed in January 2013, with the loss of several jobs.

The University, Fife Council and Creative Scotland have cautioned that it will take some time for the Byre to return to full-frequency operation, given the lead times and planning required for many of the productions it hopes to stage.

A formal opening is planned for late Autumn and the University has contracted Bard of the Botanics and director Gordon Barr to produce Jack and the Beanstalk this Christmas.

St Andrews Principal, Professor Louise Richardson said: "We are absolutely delighted that Fife Council, Creative Scotland, the community and the University have come together to ensure a bright future for the Byre. We look forward to working together in innovative and creative ways to forge a fabulous centre for the arts right here in St Andrews whose impact will be felt all over Scotland."

Councillor David Ross, Leader of Fife Council said: "The Byre Theatre is an important cultural asset for both St Andrews and Fife and I'm pleased that its long-term future has now been secured. It's not been the easiest of journeys and I would like to thank the local community in particular for their patience and understanding over the last eighteen months. However, we can now look forward to this iconic building opening its doors on a full-time basis once again. I have every confidence that under the University's stewardship, The Byre will go from strength-to-strength and will very soon be delivering a high-quality programme of community and professional dance, music, film and theatre."

Janet Archer, CEO, Creative Scotland, said: "We are delighted that The Byre is soon to re-open. The agreement ensures that The Byre will return as an arts venue for professional and community use as well as becoming a connected part of St Andrews University. We welcome the University's long term commitment to The Byre - home to many significant local festivals and a valued venue within the professional touring network - and the stability which this will provide over the coming years."

Alan Tricker, Secretary of the Friends of the Byre which has long campaigned for the theatre's re-opening, said: "The Byre Theatre was built and run by local theatre enthusiasts and in its various incarnations has been a hub for professional, community and university theatre activities for over 80 years. The Friends of the Byre are delighted that after 18 months of closure, the Byre is going to re-open. The plans outlined by the University of St Andrews show their commitment to revitalise what is the best small theatre in Scotland, and turn it into a beacon for the arts in St Andrews."

St Andrews will make a further announcement next week on the appointment of an artistic director and a technical manager.