Air New Zealand has agreed to sell nearly 20% of its share in Virgin Australia to China’s Nanshan Group for approximately $193m.
Nanshan Group owns Chinese start-up carrier Qingdao Airlines.
The deal is yet to receive approval from Chinese regulators.
Air New Zealand chairman Tony Carter said in a statement: "We believe Nanshan Group will be a very strong, positive and complementary shareholder for Virgin Australia.
"The sale will allow Air New Zealand to focus on its own growth opportunities, while still continuing its long-standing alliance with Virgin Australia on the trans-tasman network."
Air New Zealand currently owns a 25.9% stake in Virgin Australia and is mulling over options on the rest of its Virgin Australia shares.
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By GlobalDataSingapore Airlines also has a stake in Virgin Australia and received approval from Australia’s Foreign Investment Review Board to increase its stake in the company to 25.9%, reported Atwonline.
UAE-based Etihad Airways also has a 25.1% stake in Virgin Australia.
Virgin Australia said in a statement: "We look forward to meeting with Nanshan Group over the coming weeks to discuss the proposed acquisition."
In May, Chinese conglomerate HNA Group announced that it would buy a 13% stake in Virgin Australia for $114m and prepares to raise its stake to 19.99%.
With the deal, Virgin Australia aims to increase access to the growing Chinese travel market and plans to begin direct flights between Australia and China.
