The deal is expected to be completed in three to four weeks and would value the South Yorkshire club at up to pounds 10m.
Conrad, which owns the Le Coq Sportif sports brand and the Bobby Charlton football schools, will be renamed Sheffield United. Michael Edison, chief executive of Conrad, said he would resign from the post after the deal was agreed because he was a director of Manchester United. He described the Old Trafford club as his "first love".
The new, merged Sheffield United would have a combined turnover of pounds 15m- pounds 12m, of which at least pounds 5m would come from the football team.
Asked why it had chosen Sheffield after losing out to Caspian in the battle for Leeds, the company said: "Conrad was looking for a club with certain criteria - a big city, a strong following, modern stadium and a good ground with room for expansion. Sheffield met all the criteria apart from one - it's not in the Premiership but we feel that it has a reasonable chance of getting that."
Conrad's shares have been suspended at 6.75p. Stephen Hinchliffe, the former head of Facia, the collapsed retail group, has sold his 10 per cent stake in Sheffield United.Reuse content