The firm announced the signing of an agreement to sell its Long Products Europe business, including its plant in Scunthorpe, to investment firm Greybull Capital.
The sale covers several UK-based assets including the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a mill in northern France.
The Long Products Europe business employs 4,800 people - 4,400 in the UK and 400 in France.
Bimlendra Jha, executive chairman of the Long Products Europe business, said: "Today marks a significant milestone in the sale of the Long Products Europe business. This sale is the best possible outcome for employees who have worked relentlessly to ensure the business's survival, and helped to make it attractive to a potential buyer."
Hans Fischer, chief executive of Tata Steel's European operations, said: "Under these current challenging market conditions in Europe with the soaring levels of imports from China, we are happy that Tata Steel UK and Greybull Capital have entered the final stage of completion of the sale of shareholding in Longs Steel UK.
"This transaction will offer a future for the Long Products Europe business and its 4,400 employees in the UK."
Union members at Scunthorpe are currently being balloted on whether to accept a 3% cut in pay and reductions in pension contributions for a year to smooth the path for the deal, with the result due next week.
Dave Hulse, national officer of the GMB union, said: "These have been really difficult times for GMB members over many months of uncertainty.
"GMB welcomes the announcement that Greybull Capital has reached an agreement with Tata Steel that safeguards our members' jobs, especially given the recent announcement that Tata will sell its entire UK operation.”
Business Secretary Sajid Javid said: "Today's announcement is a step in the right direction for the long-term future of British steel manufacturing in Scunthorpe.
"This agreement wouldn't have been reached without the efforts of all those involved especially the high-skilled workforce and local management.”
The existing management team will stay and run the business, implementing the plan they have drawn up to return the company to profitability.