The third-richest man in America, Oracle Corp. co-founder and CEO Larry Ellison, is buying the island of Lanai from fellow billionaire David Murdock.

Larry Ellison

Murdock’s Castle & Cooke Inc. has a signed sale agreement with Ellison for the 98 percent of the island owned by Murdock, including the two resort hotels, golf course, water utility and roughly 88,000 acres.

Castle & Cooke filed documents with the state Public Utilities Commission today disclosing the sale. The price was not disclosed but the company said it was hundreds of millions of dollars.

Castle & Cooke said in its filing that the sale to Ellison plans to bring new investment to Lanai that should result in reinvigorating tourism, stimulating the economy and creating new jobs on the island. "The buyer anticipates making substantial investments in Lanai and is looking forward to partnering with the people of Lanai to chart the island’s future," the company said.

Gov. Neil Abercrombie said in a written statement that he looked forward to welcoming Ellison.

"It is my understanding that Mr. Ellison has had a long-standing interest in Lanai. His passion for nature, particularly the ocean is well known specifically in the realm of America’s Cup sailing," the governor said. "He is also a businessman whose record of community involvement in medical research and education causes is equally notable."

The sale stands to alter the future of the former Pineapple Island and dramatically reduce Murdock’s land ownership in Hawaii. Murdock has had a long and bumpy run as owner of Lanai, uprooting the island’s pineapple industry in favor of luxury resort and housing development where costs have exceeded returns.

Most recently, Murdock has been frustrated with some vocal Lanai residents opposing his plan for developing windmills to deliver electricity to Oahu and potentially offset past financial losses.

Murdock, a corporate raider with diverse holdings from transportation equipment leasing to biotechnology park development, acquired his initial stake in Lanai when he rescued publicly traded Castle & Cooke, one of Hawaii’s oldest companies, from bankruptcy in 1985 and became its chairman and chief executive.

Castle & Cooke’s ownership of Lanai stemmed from an acquisition James Dole made in 1922 to expand his Hawaiian Pineapple Co. Ltd. and establish the world’s largest pineapple plantation.

Murdock jolted Lanai’s plantation community by announcing he would end pineapple production by 1993, and he pursued more aggressive development of real estate that produced two luxury hotels on Lanai surrounded by hundreds of resort homes.

The 102-room Lodge at Koele in the middle of the island just above Lanai City opened in 1990, and a year later it was followed by the oceanfront 249-room Manele Bay hotel.

But luxury home sales were slow on the small island during the 1990s, a decade of economic stagnation. Lanai didn’t appear to be a good investment for Murdock, but in 2000 he bought out the stake in Castle & Cooke that he didn’t already own for $675 million, acquiring total control and freeing the company from public shareholder pressure.

Even with rising tourism and a real estate boom during much of the past decade, Lanai remained a money-loser for Murdock. He has reported that the island produced annual losses roughly between $20 million and $30 million from 2006 to 2010.

Ellison, 67, co-founded the software company Oracle in 1977 and leads the California-based firm as chief executive.

His net worth is pegged at $36 billion by Forbes, ranking him as the third-wealthiest individual in the United States. (Murdock’s net worth, according to Forbes, is $2.7 billion.)

Ellison could not be reached for immediate comment.

A Wall Street Journal article in October described the jet-flying billionaire as "one of the nation’s most voracious consumers of trophy real estate." The story said Ellison has spent hundreds of millions of dollars on property since the 1990s. Among some real estate assets he has acquired are a 249-acre estate in Rancho Mirage, Calif., with a private 19-hole golf course, a historic garden property in Kyoto, Japan, and several properties around Lake Tahoe, Calif., acquired for about $100 million, the article said.