The historic EMD cinema in Hoe Street, Walthamstow, has been sold to a religious group for £2.8 million.
The wealthy Universal Church of the Kingdom of God made owner Mohan Sharma an offer he couldn't refuse.
He signed on the dotted line on Monday morning, despite being torn about it.
Yesterday he told the Guardian: "They pushed me, and although half of me didn't want to sell it, I couldn't be sure that I would ever get another offer again."
Cinema fans in Walthamstow are in mourning as the sale of the picture house means that Waltham Forest is now the only London borough without a cinema.
Fans of the cinema are angry with the council for failing to protect it, while simultaneously pushing through plans for a 12-screen cinema multiplex in Selborne Walk.
Katy Andrews, founder of the McGuffins film club, said: "The council, in its wisdom, wants the multiplex and they wouldn't get it without closing the EMD down.
"So there was no support at all towards keeping the borough's only cinema open."
Present McGuffins co-ordinator Bill Hodgson said: "We are deeply disappointed by this turn of events but will now be negotiating with the new owners to ensure that film screenings remain available at the venue."
In June plans were lodged with the council by the UCKG to turn the cinema into an evangelical church and conference centre.
The church group courted controversy last year by recommending exorcism for an eight-year-old girl, Victoria Climbie, just before she died after being the victim of prolonged torture at the hands of her great aunt and the woman's boyfriend. The UCKG is currently being investigated by the Charity Commission for its distribution of money and on child protection issues.
Mr Sharma said the UCKG pursued him for the Grade 2 listed building, even agreeing to take over the accompanying pub and shop, despite not wanting them.
Mr Sharma had been losing money for the last 20 months, and feared his business would finally be killed off with the development of the multiplex.
He said: "I waited and waited until selling it, hoping the council would come in and help me, but I heard nothing from it."
Council planners have met UCKG representatives to discuss its plans for the building, and the group has been asked to clarify its intentions for it.
A spokesman for the council said: "We want to hear what it intends to do to see if it fits in with our vision for Walthamstow. It hasn't got back to us yet." A UCKG spokesman said: "We look forward to making a positive contribution to the community."
Negotiations for the proposed multiplex are ongoing.