The long-awaited deal has been struck at a lower price than analysts had expected. After adjustments, the net amount Mobil will receive is expected to be about $1.2bn.
This compares with the $1.6bn valuation placed on its 30 per cent stake when the joint venture was formed four years ago.
The agreement will give BP Amoco control over 8,500 petrol stations in Europe representing 12 per cent of the market - about the same as the two other big players, Exxon and Shell.
A joint lubricants venture between the two companies, covering such brands as Mobil and Duckhams, is also being dissolved with BP Amoco retaining 49 per cent of the assets and Exxon Mobil 51 per cent.
The disposal of Exxon Mobil's share in the petrol retailing venture was forced on the company by European Commission competition authorities because of the dominant market share that Exxon Mobil and BP Amoco together would have been left with.
The joint venture was put together in February 1996 with BP Amoco putting in $3.4bn worth of assets and Mobil $1.6bn worth. Exxon Mobil has agreed to pay all the costs of the transaction.
It will also make some balancing payments to BP Amoco where it is not possible to split the assets of the lubricants venture 51:49, reducing the overall purchase price by some $300m.
Under the agreement BP Amoco will also take control of fuel refineries at Grangemouth and Coryton in the UK and three other refineries on the Continent.
On the lubricants side, Exxon Mobil will take control of two facilities in France, including a refinery at Dunkirk and 10 lubricant blending plants while BP Amoco will retain five blending plants and a base oil refinery in Germany.