Seppelt Wines has been sold to the family-owned Mornington Peninsula business Stonier Wines.
It is the first brand to be sold off by wine giant Treasury Wine Estates as it slashes its wine portfolio.
Stonier plans to start winemaking at the Seppelt winery in western Victoria and utilise its heritage-listed underground wine cellars.
One of Australia's oldest and most renowned wineries has returned to private ownership.
Family-owned Stonier Wines purchased Seppelt Wines from publicly listed wine giant Treasury Wine Estates.
The sell-off is part of Treasury's plan to reduce its portfolio from 76 wine brands to fewer than 30.
The sale includes Seppelt's vineyards and winery at Great Western, in western Victoria, and its Drumborg vineyard near Portland in south-west Victoria.
The company purchased the business for an unknown figure, with the sale expected to be finalised in mid-October.
The Seppelt brand was launched by the Seppelt family in South Australia in 1851, and in 1918 the family purchased Hans Irvine's vineyards at Great Western.
Stonier Wines is one of the estates on the Mornington Peninsula and returned to local family ownership in 2022.
Stonier chief executive officer and co-owner Aaron Drummond said he was attracted to Seppelt after having worked in the Great Western wine region at the Mount Langhi Ghiran winery for many years.
"It was incredibly exciting to see the potential of the region," he said.
The sale includes the winery at Great Western, which has been dormant since 2014, but is expected to be restarted by Stonier.
"The winery facility is a considerable facility that was processing about 8,000 tonnes a year but is currently crushing nothing," Mr Drummond said.
"Our hope is to put a couple of thousand tonnes through that facility."
Stonier will also make commercial use of Seppelt's underground cellars, which have been a tourist attraction in recent years.
"We want to get them working again," Mr Drummond said.
"They're the most phenomenal natural cooling environment, so it makes sense to us, and so we'll store all our top sparkling wines in them."
Treasury Wine Estates purchased Seppelt in 2011, as part of the acquisition of Foster's Group's entire wine division.
In June this year, the company announced plans to slash its brand portfolio in a cost-cutting exercise.
Seppelt is the first brand to be sold off since that announcement.
Angus Lilley, TWE's managing director for Australia, New Zealand and Europe, said the company was pleased to find a buyer in Stonier.
"Seppelt holds a distinctive place in Australian wine, with a proud history shaped by generations of winemakers, viticulturists and people across the business and its local communities," he said.
"For the people who know and love Seppelt, it's a positive move that keeps the brand in Victorian hands."
Stonier's purchase of Seppelt comes at a time when the wine industry is under siege from falling global demand, oversupply, and low prices.
Mr Drummond said while conscious of those challenges, he was positive about the future of the industry.
"The wine industry is in probably the toughest cycle it's been in for a few decades, but the reality is that if you get the farming right and you get the wine quality right, the premium wine market is going ok, and there is growth," he said.
He said Stonier was focused on quality over quantity.
"Trying to make more wine doesn't make sense, but making better wine that can compete at a global level and really focusing on fine wine — I think there's a really lovely market for us," he said.