Toshiba says it will sell its image sensor business to Sony for about $164.68 million.
The deal is part of a restructuring plan Toshiba developed earlier this year after revelations that as far back as 2008, the company overstated earnings by $1.3 billion.
Toshiba said it will abandon its low-margin sensor businesses altogether.
Masashi Muromachi, Toshiba's new CEO post-accounting scandal, had said he planned to restructure lower-margin businesses in an attempt to revive the struggling company. The deal for the image sensor business is the beginning of that restructuring. The sensor business is part of the company's system LSI semiconductor business.
Sony is already a significant player in the image sensor market. Its products are currently used in phones made by China's Xiaomi and India's Micromax Informatix Ltd.