UPDATE 1-NHL-Molsons agree to buy Canadiens hockey team

* Molson family reaches deal in principle

* Closing expected in August if NHL approves

* Transaction worth almost $575 million- source

(Recasts, adds value of transaction, details)

By Jeffrey Hodgson and Steve Keating

TORONTO, June 20 (Reuters) - Geoff Molson and his brothers, Andrew and Justin, tentatively agreed to buy control of the National Hockey League's Montreal Canadiens on Saturday, returning the sport's most storied club to the Canadian brewing dynasty.

George Gillett, whose holdings include a part of English Premier League club Liverpool, would sell an 80.1 percent stake in the NHL franchise, Montreal's Bell Centre and concert promoter Gillett Entertainment Group in the deal.

The agreement in principle to sell the Canadiens was confirmed by a statement on the team website, which did not disclose its value. A source with knowledge of the transaction, who declined to be identified because the deal has not closed, said it was valued at almost $575 million.

Other bidders pursuing the Canadiens, who have won a record 24 Stanley Cups, included media and telecom group Quebecor Inc (QBRa.TO).

"Our family has been very proud to be associated with the Montreal Canadiens over the past eight years," U.S. businessman Gillett said in the statement.

"I am fully confident that the Molson brothers, who have been a great part of the heritage of the club, will ensure the preservation and development of this great sports institution."

HOME TO LEGENDS

The Molson family has a long history with the Canadiens, having owned the team in its glory years from 1957 to 1971, when it won many championships. Maurice "Rocket" Richard, Jean Beliveau and Guy Lafleur are among the legends who wore the club's jersey.

Gillett bought his stake in the team and all of its arena in 2001. The remainder of the franchise is held by Molson Coors Brewing Co (TAP.N).

The agreement must be finalized by the parties and approved by the NHL's board of governors before it can be closed, which is expected to occur in late August, the statement said.

"This is a very exciting time for our family and we are grateful to the many people and organizations who came forward to offer their collaboration in the development of our proposal," Geoff Molson said, adding that he hoped the league's board would look favorably on the transaction.