The terms of the deal for the 32-hotel portfolio, which includes brands such as Holiday Inn, Hotel Indigo, Best Western, were not disclosed.
But the price was described as "substantial" by Mr Taylor and is likely to have run into millions of pounds.
Chardon Management made a retained profit of £282,000 in its last financial year after provisions.
Mr Taylor, who began his career as a hotel porter at Turnberry, retains full or partial ownership of 18 of the hotels whose management will now be overseen by Interstate.
"The objective is to do less but not to do nothing and to continue in the hotel business," he said. "I still enjoy it."
The sale is just the latest stage in a career that saw him open French restaurants and cocktail bars in the 1970s, move into country clubs, engineering companies and butchers in the 1980s, to more recently bringing the Holiday Inn to Glasgow.
Mr Taylor, 73, and his daughter Nicola, who according to Companies House filings was the major shareholder in Chardon Management, will focus on the property ownership side of the hotel industry.
The family also retain the three-strong La Bonne Auberge chain of restaurants which he founded in Glasgow in 1975.
Chardon Management was established a decade ago with two hotels as to emulate a US model where the operation of hotels is managed by separate companies to those that own the buildings.
The sale eventually agreed on Tuesday night has been in the pipeline since January 2012 and had its origins in a conversation between Mr Taylor and Interstate chief executive Jim Abrahamson at Mr Taylor's Florida penthouse.
"I had been looking for institutional backing to grow Chardon further," Mr Taylor said.
"Gradually it moved from me trying to get money from him to him saying 'why don't we get the two (companies) together'."
Mr Taylor said the sale would cement the future of Chardon's 2600-strong workforce as Chardon becomes the platform for Interstate's presence in the UK. It will be combined with a portfolio to manage 14 hotels bought from Liverpool-based Sanguine Hospitality earlier this year.
Chardon Management's managing director Robert Crook will remain with Interstate, reporting to Ken McLaren, its executive vice president of international operations.
Mr Taylor denied the sale was driven by a dim view of conditions in the hotel market. Rather, he said, he could be selling out too early as the UK gradually emerges from the economic doldrums.
"I think the hotel business will peak in 2018/2020," he said.
Nicola Taylor said: "Interstate is a recognised world leader bringing 50 years of industry experience, dynamic relationships with quality brands and international experience to the table.
"Chardon's relationship with Interstate ensures a really successful future, providing our staff, owners, investors, associates, and ultimately our guests with the best experience possible."
Mr Abrahamson said: "With this acquisition, we believe Interstate is now the preeminent hotel management company in the UK and Irish markets, offering institutional and private investors a world class hotel management platform."
Interstate is a joint venture between US-based private equity-backed Thayer Lodging and Shanghai-based Jin Jiang.