Nortel is to sell its LTE and CDMA assets to Nokia Siemens Networks (NSN) for $650 million - the first step in the breakup of the company.
Announcing the deal on Friday, Nortel said that it was continuing in discussions "sell its other businesses."
"The company will assess other restructuring alternatives for these businesses in the event it is unable to maximize value through sales," it said in a statement.
Nortel said it would apply to delist from the Toronto Stock Exchange, with the stock to be suspended from today.
CEO Mike Zafirovski said: "We have determined the best way to do this is to find buyers for our businesses who can carry Nortel innovation forward, while preserving employment to the greatest extent possible."
Under the proposed deal, more than 2,500 Nortel staff - including 400 working on LTE - would transfer to NSN. It requires approvals from US and Canadian courts, which are expected to hear the case by the end of July.
Canada\'s state export credit agency, Export Development Canada (EDC), will lend $300 million to back the transaction.
NSN CEO Simon Beresford-Wylie said the Nortel assets offered the chance for the European vendor "to strengthen its position in two key areas, North America and LTE, at a price that makes good economic sense."
Nortel is the second largest supplier of CDMA infrastructure in the world, with sales to with three of the five top CDMA operators.
US carriers Verizon, Bell Mobility and Sprint Nextel, and Canadian vendor Telus issued statements supporting the deal.