Nortel Networks is seeking to sell its majority share in its Korean joint venture with LG Electronics.
The Canadian telecoms equipment maker, which has been operating under chapter 11 bankruptcy protection since mid-February, owns a 50% stake plus one share in LG-Nortel.
The decision to sell is aimed at securing "a sound future" for the LG-Nortel business, the company said.
"This proposed divestiture represents the best path forward for LG-Nortel, its customers and employees," said Peter MacKinnon, LG-Nortel's general manager.
LG-Nortel is a strong, independent, technologically astute and commercially savvy organisation, he added.
"LG-Nortel is a successful business with an accomplished leadership team, a culture of innovation, a dedicated employee base and a drive to succeed," said Mike Zafirovski, president and chief executive at Nortel.
Nortel has appointed Goldman Sachs to find possible purchasers for its stake in the profitable LG-Nortel, which is estimated to be worth up to $1bn.
In late February, one of Nortel's European executives said the company expected to emerge from bankruptcy protection within 12 to 24 months.
The company is currently restructuring, which analysts expect to include the sale of other Nortel assets.