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The group said the deal would result in a net gain of £1.5bn for the bank, which sought to raise capital after spurning the UK government’s asset protection scheme.

The deal will see Barclays continue a commercial relationship with iShares and further revenues if iShares meets performance-related hurdles.

John Varley, group chief executive of Barclays, said the deal realised a significant value for the bank.

"iShares has experienced rapid growth over the past several years and has reached a point where it can develop further on a standalone basis.

"Barclays shareholders will benefit from a reinforcement of our capital base and an ongoing commercial relationship with iShares."

The ETF provider will fall under newly established CVC Capital Partners subsidiary Blue Sparkle, if the deal is completed.

The deal has also included a "go-shop" period allowing Barclays until June 18 to tout the business to other potential buyers for more money.

But Barclays would have to pay Blue Sparkle a break fee of £120m if CVC failed to meet an improved offer and the agreement was terminated.

The bank said the deal was not expected to have any impact on the ETFs provided by iShares or the holders.

The ETF provider, which offers more than 360 products to investors, reported profits of £288m for the year ended December 31 2008 and saw AUM grow by £21bn to £226bn.

The deal could see Barclays president Bob Diamond receive a cash dividend of up to £4.7m for his stake in asset management division Barclays Global Investors, the current home of iShares within the group.

CVC Capital Partners emerged as the preferred bidder towards the end of March after Barclays announced it had held a number of discussions with third parties.