A once-popular Queenland resort island has been sold for $34 million.

South of Cairns, Dunk Island was ravaged by Cyclone Yasi in 2011. It has been sold to London-based investment group Mayfair 101, who are hoping to revitalise the picturesque island into a holiday spot.

The island has been neglected for eight years. It was formerly owned by Peter Bond, who bought it for $8.1 million in 2011 shortly after Cyclone Yasi.

Mayfair 101 is also in talks to purchase part of Mission Beach in the Cassowary Coast Region at a combined price of $194 million, with the hope of transforming the region into a major Australian tourist spot.

"Located between two world-heritage areas, our vision is to create a tourism mecca with Dunk Island becoming one of the most sought-after island destinations in the Asia-Pacific region," said managing director James Mawhinney. "Mayfair 101 will be working to revitalise the local economy, support upgrades to local infrastructure and create new local jobs."