A former police station which was bought by the Department for Education for £7.6million has been given to a Muslim free school.

The Olive School, which opened in September 2013 and is currently based in temporary accommodation in Cazenove Road, Stoke Newington, will move to Hackney Central police station in Lower Clapton Road next year.

The former police station was closed in July and put on the market after the Mayor of London, Boris Johnson, announced it would be sold as part of cost-cutting measures to save millions across the Metropolitan Police.

Estate agents Knight Frank told the Gazette that they believed the Grade-II listed building was worth £3million in October but it went under the hammer for more than double that price at £7.6million to the Education Funding Agency (EFA), which acquires school sites for the Department of Education.

Executive headteacher Julie Bradley said the Muslim primary school was expected to move into the premises in September 2015 once refurbishment work has been carried out.

She said: “We are all absolutely thrilled. What a privilege to occupy a building that is important in terms of heritage and is central in the community.

“We are hoping the community will still be able to use it as much as they can when the pupils are not there.”

She said that “education was at the front of everything we do” at the faith school.

She added: “We follow the national curriculum, we do everything any other school is doing. The theme of community is also important. The children need to know that they are part of a very important community and have got to give something back to it. We do a lot of work in our school on charity.”

But Dave Davies, National Union of Teachers (NUT) branch secretary, said: “If the EFA have paid over the odds for the free school, we would much rather they pay for community schools in areas that have need. Hackney Learning Trust does not have the ability to open up schools to make up the shortfall in school places.

“The real crime is we know there’s going to be a severe shortage in school places in the near future. In the old days, the Local Education Authority (LEA) used to look at the birth rate and plan to match that need. Now they can’t do that.”

The primary school currently has 180 pupils across reception class and Year One and plans to grow to a total of 630.

The school has received more than 185 applications for 90 school places in September.

As previously reported by the Gazette, the money from the sale will controversially be ploughed back into the capital’s policing rather than into the borough of Hackney.