By Joe Ortiz

MADRID (Reuters) - Spanish building firm Sacyr Vallehermoso (SVO.MC: Quote, Profile, Research) said it would sell its 33.3 percent stake in France's Eiffage (FOUG.PA: Quote, Profile, Research) but will first have to tie up any legal problems remaining from a long and bitter dispute.

Sacyr said it agreed with Eiffage to sell the shares to French institutional investors at 63 euros per share, for a total of about 2 billion euros ($3.2 billion).

The deal will give it a capital gain of about 30 million euros and help reduce its 19.7 billion-euro debt pile.

"It's a 10 percent cut to their debt which comes at a very important moment, when its concessions unit is going to come to market, and that could get them a further 2 billion euros," said a sector analyst who declined to be named.

Sacyr shares rose 4 percent in early trade but then fell to close 3.9 percent lower at 21.70 euros as confusion continued to hang over the deal. Eiffage dropped 1.1 percent.

Market sources said the stake would be bought by about 10 investors including Caisse des Depots, CNP Assurances (CNPP.PA: Quote, Profile, Research), AGF (ALVG.DE: Quote, Profile, Research), Axa (AXAF.PA: Quote, Profile, Research), BNP Paribas (BNPP.PA: Quote, Profile, Research) and Groupama.

Eiffage declined to comment on the deal but sources close to the negotiations said the French public works company had not agreed anything with Sacyr. Sacyr said it would sell the stake "to French institutional investors accepted by Eiffage."

Sacyr countered that its news release sent on Tuesday night had been approved by Eiffage Chairman Jean-Francois Roverato and in a further statement on Wednesday night produced an e-mail that appeared to show the statement had been sent from Eiffage lawyers Bredin Prat.