General Motors has agreed to selling its ailing Hummer brand to Chinese firm Sichuan Tengzhong Heavy Industrial Machinery for an undisclosed fee.
GM had been in talks with Tengzhong for a number of months and the deal will be subject to regulatory approval.
GM boss Fritz Henderson said: "Hummer is a strong global niche brand and this agreement signifies another important milestone in writing the next chapter of both GM and Hummer."
Under the terms of the deal, Hummer's current management team will remain in place. Tengzhong will take an 80 per cent stake in the company, with the remaining 20 per cent going to Hong Kong entrepreneur Suolong Duoji.
Tengzhong will be focusing on improving efficiency, including the introduction of diesel engines.
Yang Yi, chief executive of Tengzhong, said: "We are excited about some of the initiatives already underway at Hummer that we believe our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel efficient vehicles to meet not only future regulations but also customer expectations."
GM has already announced that it is discontinuing the Saturn and Pontiac brands, and is close to finalising the sale of its European brands Saab, Opel and Vauxhall.