Tesco today confirmed the sale of Dobbies garden centres to a group of investors led by Midlothian Capital Partners and Hattington Capital.
The supermarket's share price edged up 0.2 per cent in early morning trading after the announcement.
Tescos bought Dobbies in 2008 for £150m and has now sold the garden store chain for £217m - a deal that has been in the wings since April - a year after Dobbies lost £48m.
Tesco sold off a number of assets lasts year, including its South Korean business Homeplus for £4.2bn.
Tesco's chief executive Dave Lewis said: "Through their hard work and dedication to customer service, Dobbies colleagues have built a great business, and I would like to thanks them for everything they have done.
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"It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths."
Simon Quinton Smith of Quinton Edwards, a leading garden centre and horticultural property consultant, said:
The purchase by this group is good for the industry, good for suppliers and will allow greater competition and more investment in the sector.
Andrew Bracey of Midlothian Capital: "Dobbies is an iconic brand and we believe that Dobbies can be the market leader in the garden centre sector. It has a superior team that, with our long-term vision and capital, will grow this business across Britian."
Barney Burgess of Hattington Capital said: "The prospects for Dobbies are excellent: it has significant potential for growth in an underserved and underdeveloped sector. This is one of the most exciting opportunities in British retail."