An Ica store in Stockholm. Photo: ICA
The 2.8 billion kronor ($385.2 million) deal will see Ica stores taken over by the rival supermarket chain.
"In recent months we have analyzed several options for the Ica group in Norway," wrote group CEO Per Strömberg in a statement.
"We have concluded that the best option is a sale," he added.
ICA will make a capital gain of 1 billion kronor from the sale, conditional upon approval from the Norwegian competition authority, Konkurransetilsynet.
ICA Norway's turnover in the year to June 30th was 15.9 billion kronor.
But the company has long struggled with "severe profitability problems", writes news agency TT.
553 stores and more than 3600 workers in Norway will be affected by the deal.