The Southern District Health Board announced the unusual move last night in a statement, and said no-one was available to answer further questions.
The Observatory Village Trust, set up by Waitaki District Health Services, will care for the 50 residents from as early as December 9.
Next August, residents could move into the new aged-care facility the trust is building on Observatory Hill.
The SDHB said it facilitated the deal, and was pleased with the outcome.
When contacted, Rendell on Reed director Vic Inglis, said the trust would take over the rest-home some time between December 9 and December 15.
''It is mainly [because of] staffing issues. The original building in there is very difficult to man efficiently.
''And it's also very difficult to get core clinical staff to stay at Rendell on Reed for some reason.
''Whether we're isolated in that circumstance, I'm not sure. Maintaining core clinical staff has always been a problem for us.''
Mr Inglis, of Dunedin, is a director of Seniorcare Nominees, which owns the home.
In September, the Otago Daily Times reported on tension between management and staff.
At that time, the company hoped to hire a new facility manager, who would have been the seventh manager in two years.
ETu union organiser Ann Galloway told the ODT in September she felt optimistic about the situation, but that the ''proof is going to be in the pudding''.
Mrs Galloway could not be contacted last night.
