Chelsea have lost out in their bid to move to Battersea Power Station. Photo: Dominic Lipsinki/PA Wire

Mayor of London Boris Johnson has hailed the choice of a preferred bidder for Battersea Power Station as a “step forward” for the capital.

Administrators in control of the iconic site have accepted a joint bid by Malaysian property developers S P Setia Berhad and Sime Darby Property Berhad.

They have entered into an exclusive agreement to take negotiations towards the sale of the site and associated land by early July.

The Mayor said the developers are committed to the construction of a new underground station as part of the proposed extension of the Northern Line, vital to the regeneration of the Vauxhall and Nine Elms district and the creation of thousands of new jobs.

Mr Johnson said: “I believe we see light at the end of the tunnel in the sorry saga that has dogged this great landmark for decades and the surrounding area.

“There is still detailed work to do but this is an encouraging step forward.

“In particular, the firm commitment on the table to invest in the vital new transport link will drive the regeneration of this important corner of the capital that has been neglected for so long.”

Acceptance of the Malaysian bid has dashed Chelsea football club’s hopes of building a new stadium at Battersea Power Station.