Gatwick Airport is to be sold to help ease current operator BAA's existing debts.
The news follows an independent inquiry that found BAA's airports monopoly in the UK was having a knock-on effect on customers, which were not benefiting from competition within the industry.
BAA says it will sell its 100% interest in Gatwick for £1.51bn, £55m of which will be dependent on future traffic performance and the buyer's future capital structure, in December, if the EU approves the sale.
After recent debacles at Heathrow's new Terminal 5 and the global financial melt down, BAA has been looking for ways to pay back debt, which stood at £9.6bn in June.
The operator, which owns seven airports in the UK, including Heathrow, and a number of overseas airports, says the sale will help it concentrate on its other UK interests.
It is not the first airport BAA has sold in recent times, investment fund GIP having bought two thirds of London City Airport. BAA is currently appealing an order for it to also sell Stansted Airport.
BAA chief executive Colin Matthews said the decision marks a considerable change in the way BAA operates.
"Gatwick and its people have long been a central part of BAA," he said. "BAA will now focus on improving Heathrow and our other airports."