Luxury conglomerate LVMH has agreed to sell Donna Karan International for $650m (£496m) to American fashion licensing and manufacturing group G-III Apparel Group.
The sale of Donna Karan International, which is the parent company of the DKNY and Donna Karan brands, is expected to close in late 2016 or early 2017.
It comes a year after Donna Karan stepped down from the helm of the fashion company she launched in 1985.
This is only the second time LVMH has offloaded one of its prized lines, after it sold Christian Lacroix to the US duty-free chain Falic Group in 2005.
The French luxury titan's fashion and leather goods sales were flat in the first quarter of this year, though its revenues were boosted by wine, spirits and perfume sales.
LVMH said in a statement today it had not considered selling Donna Karan International until it was approached by G-III.
Toni Belloni, group manager director of LVMH, said: "We believe the DKNY brand has a dynamic position in the market, and when G-III approached us about acquiring the brand, we concluded that the time was right and that G-III was the right steward going forward."
G-III, which owns the fashion licences to Calvin Klein, Tommy Hilfiger, Karl Lagerfeld and Guess?, will fund the deal through new debt and $75m of G-III common stock that will be issued to LVMH.
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"Donna Karan brings increased scale and diversification, while providing incremental growth on top of our portfolio of some of the best fashion brands in the world," Morris Goldfarb, chief executive and president of G-III, said.
"We believe we are well positioned to create and sustain additional value for our shareholders, partners and customers."