Rex will pay $2.8 million to purchase the hangar, originally built by Douglas Aerospace using a $2.5 million loan from council that was defaulted on in May last year.

It will sub-lease the land the hangar sits on from council under a long-term deal once the sale of the building is complete.

The airline indicated in a statement issued on Tuesday morning it intended to continue to use the hangar for plane painting activities.

“While aircraft painting is not core to our activities, we believe that we are in the best position to make this business viable given the substantial synergies with our heavy maintenance base (which) is also located at Wagga airport,” Rex chairman Lim Kim Hai said.

Rex would not comment on Tuesday as to whether it would establish an in-house aircraft painting division or outsource the activities to a subcontractor, or whether former Douglas Aerospace personnel, including its owner Doug Clarke, will be involved in the venture.

Wagga mayor Rod Kendall said that was now a matter purely for Rex, with council reverting to a role of simply playing landlord.

“Whoever they want to employ or subcontract won’t be of concern to council,” he said.

Under the agreement, council will pay for rectification works on the hangar, to cost up to $400,000, that are expected to take four months to complete.

Those works will allow a building certificate to be issued, however council general manager Alan Eldridge indicated last month there would be further costs to be incurred to make the hangar fit for painting planes.

Mr Eldridge said in mid-December it could cost “up to about $1 million” to bring the hangar up to scratch as a painting facility.

It is currently unclear whether council or Rex would be responsible for covering any extra costs to complete that extra work.