A memorandum of understanding has been signed for the German-based site's Paper Machine 5, as well as related real estate and infrastructure assets.

Metsä Tissue, which along with M-real is part of the Metsäliitto Group, said it planned to convert the paper machine, which produces carbonless papers, to make products that did not compete with M-real's grades.

A spokesman for M-real said the company's supply capabilities would remain the same and that the partial divestment was expected to be closed during the fourth quarter of 2010.

In December last year, M-real announced plans to close its two speciality paper machines at its Reflex mill and to "streamline the organisations" at both that mill and its Gohrsmühle site, also in Germany.

The negotiations were to result in 220 job losses, which will now be reduced to 170 as a result of the transfer of 50 jobs to Metsä Tissue.