Situated in a 365-acre estate, 150 miles west of Dublin, the five-star 83-bedroom hotel was put up for sale after going into receivership in November 2011 in the midst of Ireland's real estate crash.
Irish developer Gerry Barrett paid â¬50m (£42.8m) for the property which dates back to the 13th century, in 2007. It was converted into a hotel after being the home of the Guinness family from 1855 to 1939.
Beatrice Tollman, president and founder of Red Carnation, said she was delighted to announce the company's purchase of the hotel.
"Like the rest of our hotels, Ashford Castle is an iconic property, in a unique location and with a reputation for luxury and excellence, and we are delighted that we will be bringing some of Red Carnation's signature touches to it," she explained.
Jonathan Raggett, managing director of Red Carnation, added: "We look forward to working with Ashford's general manager Niall Rochford and his excellent team, and also to seeking the best local talent to grow the workforce.
"We will be working with local suppliers and partners on a refurbishment programme that will restore this illustrious hotel to its former glory, and build on the fine reputation that the hotel already enjoys."
Ashford Castle - currently a member of Leading Hotels of the World - was described by Tom Barrett, head of hotels at Savills Ireland, on marketing the property, as "the jewel in the crown of Irish hospitality". He said that it is particularly popular with American guests who make up more than half its visitors during the summer.
The hotel has a spa, nine-hole golf course and fishing rights on the Cong River and Lough Corrib Red Carnation Hotels now has 15 hotels in the UK, South Africa, Florida, Switzerland, Ireland and Guernsey.