The former Canadian high-tech giant, which has largely been dismantled and sold off in pieces under court supervision, owns 62 per cent of Guangdong Nortel.
The division was established in 1995 to provide the region with certain telecom equipment and services for CDMA and GSX wireless networks as well as support for Nortel landline network switches.
Nortel said it plans to close the sale in the first quarter of next year, and the transaction is still subject to certain price adjustments, regulatory approval and other conditions.
"This sale is a milestone in that it is the last of Nortel's significant business divestitures,'' said Nortel's chief strategy officer George Riedel.
All of the division's 1,100 employees will be offered jobs with Ericsson, the company said.
Nortel began restructuring under bankruptcy protection from creditors nearly two years ago under the federal Companies' Creditors Arrangement Act in Canada, Chapter 11 of the U.S. bankruptcy law. The company has sold almost all its operating businesses to various buyers for $3.2 billion.
At its peak during the 1999-2000 technology boom, Nortel was Canada's most valuable company after the telecom equipment maker went through several years of rapid expansion and diversification funded by debt and stock sales.
