Project can be transfered to namespace and out now

app/controllers/admin/groups_controller.rb

@@ -50,8 +50,7 @@ class Admin::GroupsController < AdminController
     project_ids = params[:project_ids]
 
     Project.where(id: project_ids).each do |project|
-      project.namespace_id = @group.id
-      project.save
+      project.transfer(@group)
     end
 
     redirect_to :back, notice: 'Group was successfully updated.'
@@ -59,8 +58,7 @@ class Admin::GroupsController < AdminController
 
   def remove_project
     @project = Project.find(params[:project_id])
-    @project.namespace_id = nil
-    @project.save
+    @project.transfer(nil)
 
     redirect_to :back, notice: 'Group was successfully updated.'
   end

app/models/project.rb

@@ -226,4 +226,18 @@ class Project < ActiveRecord::Base
   def code
     path
   end
+
+  def transfer(new_namespace)
+    Project.transaction do
+      old_namespace = namespace
+      self.namespace = new_namespace
+
+      old_dir = old_namespace.try(:path) || ''
+      new_dir = new_namespace.try(:path) || ''
+
+      Gitlab::ProjectMover.new(self, old_dir, new_dir).execute
+
+      save!
+    end
+  end
 end

app/observers/project_observer.rb

 class ProjectObserver < ActiveRecord::Observer
   def after_save(project)
-    # Move repository if namespace changed
-    if project.namespace_id_changed? and not project.new_record?
-      old_dir = Namespace.find_by_id(project.namespace_id_was).try(:path) || ''
-      new_dir = Namespace.find_by_id(project.namespace_id).try(:path) || ''
-
-      Gitlab::ProjectMover.new(project, old_dir, new_dir).execute
-    end
-
-    # Update gitolite
     project.update_repository
   end