Birmingham city council is to sell off one of its landmark assets, the National Exhibition Centre (NEC), to help pay a £1bn bill to settle thousands of equal pay cases.

The Labour-led city council has agreed settlements with female staff including home care workers and school cooks who were paid less than men for work of equal value. Some men have also been included in the payouts and claims are still being submitted.

The council has borrowed money to help fund the settlements but the Department for Communities and Local Government (DCLG) will not allow it to take on any more loans.

The NEC bills itself as the UK's premier venue for trade and consumer shows, with more than 140 events attracting 2.1 million visitors a year. The world-famous dog show Crufts is being held at the NEC from Thursday.

Birmingham city council, the UK's biggest local authority, has been warning that it may soon no longer be able to pay for services such as caring for vulnerable people and rubbish collection unless dramatic changes are made to funding or the structure of local government.

The council confirmed on Wednesday that it was selling off the entire NEC Group, which includes the NEC, the International Convention Centre in the city centre and two arenas: the LG Arena and the National Indoor Arena. The NEC opened in 1976.

Sir Albert Bore, leader of the council, said it was a historic day for the city but admitted it was tinged with sadness as well as excitement. Bore described the NEC as an 'iconic" venue and said that when development began there was scepticism there would be a call for such a venue outside of London.

He said: "A key purpose of the city council investing in establishing the NEC Group more than 30 years ago was to drive economic development and regeneration. This has been achieved but now the NEC Group has reached a point in its evolution where it needs to be able to adopt the financial disciplines of a private rather than council-owned company to enable the next stage of strategic development. In doing so, economic impact and job creation can be preserved and enhanced."

Bore played down the idea that the sale was taking place simply because of the equal pay issue the city council faces, and said money realised would be used to fund other capital programme expenses.

The city council said: "The NEC Group is a vitally important contributor to the West Midlands economy, delivering an economic impact of over £2bn pa and supporting some 29,000 full-time equivalent jobs in the region. Securing and enhancing this economic impact is a key objective for Birmingham city council.

"A strong NEC Group attracts further economic activity to the region. The NEC Group's position would be strengthened through private sector ownership, and this should act as a catalyst for further investment in the region.

"The city council will invite potentially interested buyers to participate in a pre-qualification process while sale preparations are finalised."

It added: "In structuring a transaction, the city council intends to ensure that the existing uses of the exhibition centre, International Convention Centre and two arenas (LG Arena and National Indoor Arena) are preserved. This will secure the profile of Birmingham and the broader West Midlands as a world-class home of a broad array of live events."

The ICC and the NIA, which are both close to Birmingham city centre, had boosted the "cultural and economic" life of the city, said Bore, hosting events such as the G8 summit at the ICC in 1998.

But he said that after almost 40 years it was time for the NEC to be "freed" from the limits imposed by relying on a local authority as its prime funder. Bore refused to put a figure on how much the group was worth but previously it has been put at around £300m.

There was mixed reaction to news of the sale. Many local people expressed sadness that venues they had pride in would be lost from public to private ownership.

Conservative councillor Robert Alden said he would rather the council was better able to deliver key services such as street cleaning rather than running venues like the NEC.

Under the proposals, the NEC could be made available on a 100-year lease and the nearby LG Arena. Shorter leases of around 25 years would be drawn up for a sell-off of the city centre sites the National Indoor Arena and the International Convention Centre.

A brief history of the NEC

1973 Prime minister Edward Heath unveiled a plaque and cut the tape to start the construction work

1976 The Queen opens the International Spring Fair at the NEC

1980 Completion of the NEC Arena – first event was a concert by the rock band Queen

1991 International Convention Centre officially opened by the Queen in the city centre

1991 National Indoor Arena officially opened by athlete Linford Christie