BSkyB is thought to have lost £500m on its ITV investment
The pay-TV group BSkyB says it has sold a 10% stake in rival broadcaster ITV - more than half of the shares it owned.
The sale of the stake, which is worth £196m ($305m), will end a long-running legal battle over its investment.
Morgan Stanley said on Monday it was acting as bookrunner in the placing. BSkyB will keep 7.5% of shares in ITV.
That is the maximum level allowed by the British competition authorities. BSkyB bought the shares in 2006, paying £960m for it.
The matter was referred to the Competition Commission in 2007, and in 2008 BSkyB was ordered to cut its stake to below 7.5%.
It said the stake gave the company undue influence in the UK media and it was therefore not in the public interest.
'Threat to democracy'
BSkyB's original investment sparked a fierce public row between the company, led by its then-chief executive James Murdoch, and Virgin Media's largest shareholder, the entrepreneur Richard Branson.
Mr Branson accused the Murdoch media empire of being a "threat to democracy" while politicians also questioned the move.
BSkyB has fought hard to keep hold of the shares, going through a series of court appearances - which it lost.
Its last chance was to go to the Court of Appeal - a move which it was told would be unlikely to result in success.
In a statement the company said: "Sky intends to retain its residual 7.5% investment in ITV for the medium term and to remain a committed shareholder of ITV."
ITV shares closed down 2.3% at 51.3 pence before the announcement. BSkyB, which bought the ITV shares priced at 135 pence, itself closed flat.
ITV recently ended its long-running search for a chief executive, attracting Adam Crozier from his post as head of the Post Office.
He joins another heavy-hitting management figure, Archie Norman, now chairman of ITV. His past positions include being a Conservative MP and the boss of supermarket giant Asda.