The deal comes shortly after the Anglo-Dutch company agreed to exit the Majnoon oilfield, one of the largest fields in OPEC member Iraq, and hand over its operation to state-run Basra Oil Co (BOC) by end-June.
Shell EP Middle East Holdings B.V. will sell the entire share capital of Shell Iraq B.V. (SIBV), which holds a 19.6 percent stake in the oilfield to a unit of Itochu, the Anglo Dutch company said.
As part of the deal, Itochu will also assume debt of $144 million.
The oil major has received the necessary regulatory consent, and was expected to complete the sale soon, with an effective date of Dec. 31, 2015, Shell said.
A senior Iraqi oil official had told Reuters in January that Iraq had approved the sale.
The West Qurna 1 oilfield, operated by Exxon Mobil Corp (XOM.N), produces around 405,000 barrels per day.
Reporting by Arathy S Nair in Bengaluru, Editing by Sherry Jacob-Phillips