Indian giant Tata Steel began the formal sale of its loss-making British arm on Monday, as it announced it was selling its Scunthorpe plant for a nominal fee.
In the face of a political row over the potential loss of thousands of jobs, Tata Steel said it had agreed to sell some of its assets in Britain to Greybull Capital, a British-based family investment office.
The acquisition of Tata Steel's Long Products Europe (LPE) division, which includes the Scunthorpe steelworks in northern England, is expected to complete within eight weeks, subject to conditions being met.
"This transaction will offer a future for the LPE business and its 4,400 employees in the UK," said Hans Fischer, chief executive of Tata Steel's European operations.
Greybull said the business will be renamed British Steel. As part of the deal, it is arranging a £400 million ($570 million, 500 million euro) investment and financing package.
The sale of LPE covers two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, plus a mill in northern France.
"The board of Tata Steel Europe... has decided to commence the process of divestment of its entire shareholding in its subsidiary Tata Steel UK," it said in a statement.
Fischer said the industry was facing "challenging market conditions in Europe with the soaring levels of imports from China".
Britain's Business Secretary Sajid Javid was to address parliament later on his efforts to find a buyer for Tata's loss-making British arm. He flew to India last week to meet company executives.
"Today's announcement is a step in the right direction for the long-term future of British steel manufacturing in Scunthorpe," he said.
"We will continue to work with Tata and Greybull and, as we have said, stand ready to provide funding on a commercial basis if required."