Sainsbury's Bank will now become a 50:50 joint venture between Sainsbury's and HBOS with equal control and input and at shareholder and board level.
Proceeds from the sale will be used for general business purposes, the retailer said.
Meanwhile, Allan Leighton, chairman of Royal Mail and former CEO of Asda, is ready to take control of Sainsbury's in the event of a takeover bid, according to reports in the Guardian.
“All the private equity groups have approached him. They all want his advice. He wants to get involved. But his view is that north of 550p it becomes hard to make it work,” a friend of Leighton told the paper.