The Ryanair board has accepted an offer from International Airlines Group for its 29.8 percent holding in Aer Lingus.
The move now opens the way for a €1.3bn bid by British Airways and IAG for the Irish carrier.
IAG want to create a transatlantic hub at Dublin airport.
Ryanair says it will make a small profit on its nine year involvement with Aer Lingus.
The deal is subject to approval by the European Union.
Ryanair has attempted to buy Aer Lingus on three occasions over the past 10 years only to see its plans stymied by the competition authorities.