Lloyds Banking Group today said up to 460 full and part-time jobs would go after it agreed to sell its Halifax Estate Agencies division for £1.
The sale of the loss-making business to Your Move owner LSL Property Services will see the closure of 121 banking counters within the agency's offices early next year.
Lloyds said the agency, which has 218 offices, was no longer part of its plans although it added compulsory redundancies among counter staff would be a "last resort".
The group, which is 43 per cent owned by the taxpayer, said the vast majority of the counters which are closing were within a mile of a Lloyds TSB or HBOS branch.
Around 1,050 HEA staff will transfer over to LSL, which will rebrand the offices as Your Move, Reeds Rain or Intercounty.
The deal makes LSL the second largest estate agency network in the UK. Although the group is cautious over prospects next year due to a continuing lack of mortgages, the firm said the deal sets it up to benefit from any property market recovery.
Chairman Roger Matthews said: "This is is a significant opportunity for LSL to acquire a high quality branch network, an established asset management business and pipeline of sales on favourable commercial terms at a low point in the economic cycle."
The disposal comes as Lloyds looks to reduce its presence on the high street to appease European competition officials following its rescue of ailing HBOS at the height of the financial crisis a year ago.
Competition commissioner Neelie Kroes has been in talks with both Lloyds and Royal Bank of Scotland over the details of state support amid concerns that bailed-out banks could be seen as distorting the market.
Lloyds agreed in March to put £260 billion in toxic debts into a taxpayer-backed insurance scheme but is said to be looking to raise around £26 billion to avoid the scheme and prevent the Government's stake rising to 62 per cent.