A bitterly contested seven-year saga will take a major step towards resolution on Thursday when West Ham are announced as the main tenants for London's Olympic Stadium.

The club have agreed a 99-year lease with the London Legacy Development Corporation, which is expected to unveil detailed plans for the new design on Friday, and will embark on a concerted campaign to sell the scheme to fans.

Long-running, often tense, negotiations between the East End club and the LLDC have resulted in a deal that both parties are understood to be happy with. For West Ham, it will give them a new, state-of-the-art stadium at marginal upfront cost and expand their capacity to 60,000 as well as making the club an attractive investment opportunity.

For the LLDC chairman, Boris Johnson, who has long been convinced that a Premier League football team offer the best chance of success for the stadium, it will mean the reopened Olympic Park will have a guaranteed focal point and global profile. In addition to football and athletics, the stadium will be used for pop concerts and other sporting events.

Johnson insisted on a clause in the contract ensuring that the public purse would be protected if West Ham were sold in the future. David Gold and David Sullivan, who between them own two-thirds of the club, have insisted that the club are not for sale. The proceeds from the sale of Upton Park for redevelopment will be used to help pay down the club's £70m debt. All the club's bank debt must be cleared by the time they move to the Olympic Stadium for the 2016-17 season as they will no longer have an asset to secure it on.

Conversion of the stadium to make it suitable for both football and athletics, with retractable seats and a new cantilevered roof to cover them, will cost at least £150m. Of that, the majority will come from the public purse, including a £40m loan from Newham Council.

An earlier deal to award the stadium to West Ham, following a bitter battle with Tottenham Hotspur, had to be abandoned when it became mired in "legal stasis" following challenges in the high court and to the European Union.

Leyton Orient's owner, Barry Hearn, has vowed to press on with his judicial review of the process, claiming it will "crush" his club if they are not allowed to share with West Ham. But he has also conceded that he is ultimately unlikely to be successful and is drawing up alternative plans to move to Essex.

Hugh Robertson, the sports minister, refused to confirm the imminent announcement but said: "I thought there was a really obvious end to this, which was going to be a multi-use stadium with football at its heart. I always suspected that would be the way to get the stadium best used.

He said he was confident a way could be found to accommodate matches for the 2015 Rugby World Cup in the stadium, despite the complication of having to pause construction work to host them.