Kodak's UK pension fund is buying the beleaguered business's consumer and scanner operations to allow the US company to emerge from bankruptcy.
The deal – which involves the pension fund handing over $650m (£419m) to the company – will wipe out Kodak's $2.8bn debt to thousands of British pensioners.
The two units being sold are personalised imaging, which includes most consumer products and retail printing kiosks, and Kodak's document imaging unit, that makes scanners for business customers.
Antonio Perez, the chairman of the struggling film group, said that in one transaction the company would divest the businesses and "settle its largest legacy liability", calling it an "extraordinary result".
The Kodak UK pension scheme is currently facing a £1.9bn deficit. That will be closed and members offered the chance to join a new scheme which will have lower benefits but spare scheme members the prospect of having to rely on a statutory rescue fund, which could leave them even worse off. The scheme has nearly 15,000 UK members, including 8,610 who are already claiming their pensions.
Steven Ross, the chairman of the scheme, said: "This settlement gives members greatly improved future prospects while being good for Kodak's employees, its creditors and for UK business."
The deal has to be approved by the UK Pensions Regulator and the US bankruptcy court.
A spokesman for the Pensions Regulator yesterday indicated that it would approve the deal. He said: "The Pensions Regulator has been engaged in discussion with the trustees and the Kodak group throughout the Chapter 11 [US bankruptcy] process.
"Although we recognise that the settlement awaits the approval of the US court overseeing Chapter 11 proceedings later this year, we believe that the agreement reached represents the best outcome for scheme members in a difficult situation. The regulator will continue its dialogue with the trustees about future arrangements."
But the independent pension consultant John Ralfe warned that the deal should not go through without close examination.
"I hope this is a genuinely better alternative than liquidation," he said. "To make sure we understand the detail the regulator should produce a 'section 89' report explaining why this is better than simply getting a share of the liquidation proceeds through the UK and US courts."
The move is the latest in a long line concerning companies facing large pension black holes choosing to fill them with assets, including Dairy Crest's scheme recently taking cheese and Johnnie Walker distiller Diageo taking 2 million barrels of whisky.
Mark Wood, the chief executive of JLT Employee Benefits, said: "The Kodak pension plan in the UK is taking on two unlisted subsidiary companies as assets. As deficits have widened, schemes are increasingly looking at alternative assets to provide cashflows, as happened with Dairy Crest and Diageo. Kodak's move goes a step further but, providing the businesses can generate enough cashflow, the principle is the same."
Kodak – which launched its first camera in 1888 – got into difficulties in recent years because it failed to anticipate or cope with the consumer shift to digital imaging. It was forced to file for bankruptcy protection in the US last year.
As part of its struggle earlier this year, Kodak sold a portfolio of 1,100 digital patents for $527m to the likes of Apple, Google and Microsoft.
Yesterday's agreement with the pension fund will be implemented as part of Kodak's Chapter 11 bankruptcy plan in the US.