One of Sydney's most sought-after private schools will relinquish its $5 million-a-year government funding to become part of a global company next year.

Reddam House, which has campuses in Bondi and Woollahra in Sydney's eastern suburbs, receives about $5 million a year in federal and state funding because it is classified as not-for-profit.

Reddam House will give up its government money to become a for-profit company from next year. Credit:Christopher Pearce

But it will give up that status and money to join the Inspired Group, which has 53 schools on five continents, it announced on Thursday. Inspired is a profit-generating company held by family and private investors.

It will be the first major Sydney school to give up its government money and become fully private, although it will still be subject to the NSW Education Standards Authority's regulations that govern every accredited school.