Olivia Newton-John's Santa Ynez ranch is set to be a new owner's "Xanadu" ... the striking property has officially sold after several months on the market.

Real estate sources tell TMZ ... a buyer has decided to be hopelessly devoted to the 4-bedroom, 5-bathroom estate located in Santa Barbara County -- one of California's famed wine regions.

Whoever walked away with the deed certainly got one hell of a deal, as the property was initially listed back in May for a whopping $8.965 million ... and it just sold for $7.95M.

The abode is worth every penny, given its luxe amenities ... sitting on 12 private acres with nearly 4,500 square feet of living space, a view of the Santa Ynez River, a gourmet kitchen, a 2-bedroom guest house, a pool, a barn, an outdoor kitchen, and a game room.

It's no wonder rumors circulated back in September that former President Joe Biden had been eyeing the property, as it's certainly fit for a man of 46's status.

However, as TMZ learned at the time, JB and First Lady Jill Biden were NOT actually planning to make the "Grease" actress' former home their post-White House pad ... it was all just a rumor.

It'll be interesting to see who actually scooped up the property ... and what, if any, plans they may have for the estate!!!