The Eye has proved to be a huge hit with tourists

The airline's one third share was bought by the Tussauds Group, which now owns two-thirds of the city's most popular paid-for tourist attraction.

BA will sell its interests in the Eye, including debts. Tussauds said it wants to invest £50m in it over the next five years and create 100 jobs.

The wheel, on London's South Bank, has attracted 18 million visitors since it opened for the Millennium.

Martin George, British Airways' commercial director, said: "I am delighted that we have reached an agreement that paves the way towards securing the future of the Eye for generations to come.

The deal will also enable us to continue to strengthen our balance sheet and focus on our core business British Airways' Martin George

"British Airways has supported the Eye for nearly a decade and will continue to do so with the extension of its franchise agreement.

"The deal will also enable us to continue to strengthen our balance sheet and focus on our core business."

Peter Phillipson, chief executive of the Tussauds Group, said: "It has been everyone's objective to create a financially secure and long-term future for the London Eye and this deal will achieve this.

"We believe that we have the operational experience through our city centre attractions such as Madame Tussauds, theme parks like Thorpe Park and national historic treasures like Warwick Castle to continue to develop The Eye as an icon that London and Londoners can remain proud of."

Rent row

Earlier this year the attraction was the subject of a rent row.

The owners of the Eye had a judicial review over an increase in rent by the landlords the South Bank Centre (SBC), which owns some of the land on which the wheel stands, thrown out by the High Court.

The SBC was reported to be demanding a hike from £65,000 to £1m-a-year.

But an agreement in principle has now been agreed for a new 25 year lease, the details of which have still to be agreed.