Saudi Arabia's Public Investment Fund (PIF) is set to acquire a "significant minority stake" in Rocco Forte Hotels.
The investment will accelerate the expansion of the hotel group, which has 14 properties across Europe including Brown's in London and the Balmoral in Edinburgh, in both existing and new global markets.
The Forte family will retain majority ownership, with Sir Rocco Forte remaining as executive chairman, but Italian entity CDPE Investimenti (CDPEI) will sell its entire stake.
The Financial Times reported the Saudi Arabian sovereign wealth fund is set to acquire a 49% stake in the hotel group, valuing the company at around £1.2b.
Forte told the paper he is seeking to double the size of his existing portfolio with new properties in the Middle East, Italy, and the US.
Forte said: "PIF is an excellent partner for us going forward. We have established an extremely good relationship during the course of our negotiations.
"They share the same vision for the brand and the future strategy of the group with the same ambition to take a long-term view. I look forward to working with PIF to expand the group and improve the high level of service we offer our customers."
Saudi Arabia's PIF has $700b (£554b) of assets under management and is controlled by the country's prince Mohammed bin Salman Al Saud. It is one of the world's most active sovereign wealth funds and last week agreed to buy a 10% stake in London's Heathrow Airport.
Turqi Al Nowaiser, deputy governor and head of international investments division at PIF, said: "Our investment in Rocco Forte Hotels reflects PIF's confidence in both the commercial opportunity and strength of the international hospitality and tourism industries that have shown remarkable resilience in recent years."
The completion of the transaction is subject to regulatory approval.
Rocco Forte Hotels was founded in 1996 by Forte and Olga Polizzi and its portfolio includes 20 private villas.
A further three hotels are due to open in 2024 and 2025.