Chinese carrier Hainan Airlines is to sell a 48% stake in Tianjin Airlines to the holding firm HNA Aviation.
The transaction, disclosed to the Shanghai stock exchange, is being conducted at CNY1.70 per share.
Hainan Airlines says the overall value of the transaction is just over CNY6.68 billion ($944 million).
It held 95.8% of Tianjin Airlines prior to the agreement, with a Tianjin free trade zone investment firm taking the balance.
As a result of the transaction HNA Aviation, with 48%, will just overtake Hainan Airlines as the largest shareholder.
Hainan Airlines will retain 47.8% while the investment firm will continue to hold its 4.2%.
The divestment is being carried out as part of a broader government strategy to "fully utilise" the services of Tianjin Airlines during the development of Beijing, Tianjin and Hebei as an international air transport hub, says Hainan Airlines.
Shareholders still have to approve the agreement, it adds.
Tianjin Airlines operates nearly 90 aircraft, according to Cirium fleets data, primarily a mix of Airbus A330s, A320- and A320neo-family jets, and Embraer E-Jets.