The move boosts Aviva’s capital surplus by £400m.
Aviva says the sale supports its strategy of focusing on the key growth markets in Asia where leading positions can be achieved.
It claims that reaching a leading position in Australia in the foreseeable future would be challenging as the market is increasingly consolidated.
Aviva currently ranks ninth in the life market and its wealth management platform is ranked eighth.
CEO Andrew Moss says: “This transaction realises excellent value for Aviva shareholders at around 16 times 2008 net earnings and demonstrates the underlying value of our business.
“It gives us greater financial flexibility and we can redeploy the capital to other markets which we believe will deliver better returns to our shareholders over the next few years.”
Aviva Investors’ Australian operation was not part of the sale process.
The sale is subject to regulatory approval and is expected to close in the third quarter of 2009.
The proceeds will be retained by the group and are expected to enhance the group’s IGD surplus by approximately £400m compared to March 31, 2009.
In 2008, Aviva Australia contributed 2.6 per cent to group IFRS operating profit and 2.3 per cent to embedded value on an MCEV basis.
Aviva Australia generated an IFRS net profit after tax of £28m and contributed £335m to group IFRS net assets and £2.3bn to group IFRS total assets for the year ending December 31, 2008.