The bank's preferred option is to sell the under-capacity 250-staff banknote operation - where volumes have dropped from 1.4bn to 1bn in the last decade - to a commercial firm, allowing it to take on outside work, possibly euro notes.
But De La Rue head of corporate affairs Mark Fearon said that first and foremost the plant would serve the bank.
The decision follows a review started by the bank earlier this year (PrintWeek, 15 February). A number of companies were invited to tender but De La Rue's offer best satisfied the bank.
"Price was, of course, an issue but De La Rue offered the best arrangements for staff," said secretary of the Bank of England Peter Rodgers.
If the bank had decided to keep Debden it would have been forced to cut more staff. The plant's total workforce has fallen from 1,200 to 450 in the last 10 years.
"Privatisation will provide a better situation for the long-term interests of staff. And as productivity increases with new work taken on, De La Rue will be able to take advantage of economies of scale," added Rodgers.
Definitive contracts are expected to be signed by spring, subject to any regulatory approval that may be required.
Fearon did not rule out restructuring and job cuts, but said it was too early to say.
De La Rue has had a troubled year having issued profits warnings and being forced to close its High Wycombe plant, but Fearon said non-banknote printing was "totally unrelated" to banknote operations.
The group's banknote printing plant in Gateshead will operate as a separate facility from Debden and will focus on specialist short-run export work.
De La Rue's shares rose 2.48% to 289.5p on the announcement.
Story by Rachel Barnes
