The stake is being sold for €246m
British tycoon Richard Branson is to sell his majority ownership of Virgin Atlantic.
The Air France-KLM Group is to acquire a 31% stake in the UK airline for stg£220m (€246m).
However the Virgin Group will keep a 20% stake, and Mr Branson will remain the largest individual shareholder.
US airline Delta will also keep a 49% stake it already owns in the carrier.
Virgin says the partnership will offer customers access to "the most comprehensive transatlantic route network".
"The enhanced joint venture, including Alitalia, would become the airline partnership of choice for customers, offering more than 300 daily nonstop transatlantic flights and increasing competitive routings with offerings across key business markets", it says.
The deal would last for at least 15 years.
Virgin Atlantic says it will remain a UK airline and continue to fly under the Virgin brand.
Jean-Marc Janaillac, CEO of Air France-KLM, said: "With our partners Delta and Virgin Atlantic, we are pleased to reinforce our transatlantic partnership, offering our customers even more choice between Europe, UK and the United States via twelve hubs on both sides of the Atlantic."
Richard Branson, Virgin Group founder, added: "Virgin Atlantic has made a big difference to people’s flying experience over the past 33 years and transformed the airline industry for the better.
"This is a fantastic opportunity to extend our network and create a stronger customer champion, as well as being extremely beneficial to our people and the Virgin Atlantic brand that our customers love dearly."
Mr Branson also sent a letter to all Virgin Atlantic staff, in which he looked back on the history of the airline.
This is not the first of Mr Branson's airlines that has undergone major change.
Back in 2016, Alaska Air Group acquired Virgin America in a deal worth approximately US$4bn (€3.5bn).
At the time, Mr Branson said: "I would be lying if I didn't admit sadness that our wonderful airline is merging with another".
"Because I'm not American, the US Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover. So there was sadly nothing I could do to stop it".