Toshiba has sold its prized semiconductor business to a group led by US private equity firm Bain Capital in a bid to keep its struggling business afloat.
The $18 billion deal is designed to cover billions of dollars of losses incurred in Toshiba's US nuclear unit.
The Japanese firm was almost delisted this year after delaying the publication of its financial results.
It said the deal, if approved, would ensure it remained public.
Toshiba is the world's number two chipmaker and its Toshiba Memory unit accounts for about a quarter of its revenue.
Bain Capital has partnered with South Korea's SK Hynix Inc and brought in US buyers of Toshiba chips such as Apple and Dell in order to buy the division.
However, there is uncertainty over whether rival bidder Western Digital will walk away from the deal amicably.
The data storage firm - which runs a joint venture with Toshiba in the US - was tipped as favourite to buy the business as recently as this week.
"We are disappointed that Toshiba would take this action despite Western Digital's tireless efforts to reach a resolution that is in the best interests of all stakeholders," the company said in a statement on Wednesday.
It has previously taken legal action against Toshiba, arguing that the deal cannot happen without its consent.
On Wednesday Western Digital launched its latest legal attack against its joint-venture partner. The firm filed new arbitration requests against Toshiba for moving to invest in a flash memory production line without its help.
