India's United Spirits said it had agreed to sell the Whyte & Mackay business to a unit of Philippine's Emperador for an enterprise value of £430m.
The Indian firm is being forced to sell Whyte & Mackay for ant-itrust reasons after Diageo moved to buy a controlling stake in United Spirits.
The UK competition authority has said Diageo's Bell's whisky competes with Whyte & Mackay's own-label and branded whisky and that its acquisition of United Spirits could lead to "a substantial lessening" in competition.
In April, Diageo launched a £1.1bn bid to nearly double its stake in United Spirits to 54.8%. The Indian company was previously owned by tycoon Vijay Mallya, who has shed assets under a heavy debt load and after the collapse of Kingfisher Airlines.
United Spirits acquired Whyte & Mackay seven years ago from its former chief executive Vivian Imerman for £595m.
The Indian company said in a statement on Friday the sale of Whyte & Mackay was subject to regulatory approvals in India and Britain as well as from the Reserve Bank of India.
The central bank's approval is needed, because the sale will result in a significant write-off of loan amounts recoverable by United Spirits from its British subsidiary, the statement added. It did not give details.
Last year United Spirits mandated Rothschild, Rabo Bank and Standard Chartered to manage the sale process.