The sale of the 4,000-megawatt coal-fired station, which supplies10 per cent of all the electricity needs of England and Wales, raises hopes for a bumper pay-out to National Power shareholders this autumn.
The disposal was forced on National Power as a condition of allowing it to take over Midland Electricity's supply business, a move which gives the generator 2.2 million domestic customers.
AES had been the frontrunner to buy Drax since the station was put up for sale last November, but it was thought that it had been edged out in the final stages by a rival US electricity company NRG.
National Power will transfer all of Drax's 580 staff to the new owner along with contracts to buy 18.2 million tonnes of coal over the next two years.
Drax contributed pounds 205m to National Power's operating profits last year - 20 per cent of the group total - and generated turnover of pounds 656m.
The sale will reduce its share of the UK generating market to around 12 per cent compared with 46 per cent at the time of privatisation eight years ago.
AES is the world's biggest power producer with 105 plants and a total capacity of 32,000-megawatts.
It already owns a 400-megawatt coal-fired plant at Uskmouth in South Wales which was bought as scrap after being closed down by National Power.
It also has interests in a number of independent combined-cycle gas- fired plants.
The Drax station, built on the south bank of the river Ouse, opened in 1974 and is Britain's most efficient coal-fired plant. It was fitted with environmental clean up kit to stop sulphur emissions at a cost of pounds 640m in 1994.
A National Power spokesman said it had not yet decided whether to return any capital to shareholders. A decision will depend on the outcome of a strategic review due this autumn.
The group is also searching for a new chief executive to replace Keith Henry. The internal candidate is its chief operating officer Graham Brown.Reuse content