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The Graythwaite estate in North Sydney has been sold to the Sydney Church of England Grammar School for $35.2 million.
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The controversial estate was donated to the government in 1915 by Sir Thomas Dibbs to be used as a convalescent home for World War 1 soldiers.
The government then put the historic 2.7 hectare property out to tender in August.
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The Grammar school has said it will restore the original Dibbs mansion and surrounds linking them into the remaining Dibbs estate on which the school is built.
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