The sale will help BofA strengthen its capital base and move closer to the Basel III standards imposed by global regulators, said Bank of America, which has suffered a steep decline in its share price in recent weeks.
"Our partnership with China Construction Bank has been mutually beneficial," Bank of America chief executive Brian Moynihan said in a statement.
Bank of America did not identify who was acquiring its shares of CCB, describing the buyers only as "a group of investors."
The New York Times reported on Friday that BofA was in talks with a group of Asian sovereign wealth funds and private equity firms like Blackstone and KKR about buying the stake.
Under the terms of the deal, which is expected to close in the third quarter of 2011, BofA will sell 13.1 billion shares of CCB and make an after-tax gain on the sale of USD 3.3 billion.
The largest US bank in terms of deposits, BofA has struggled to recover from the 2008 financial meltdown.
It posted a USD 9.1 billion loss last quarter, mostly caused by a huge USD 8.5 settlement to resolve claims stemming from its issuance of mortgage-backed securities that went sour during the crisis.
Until today, Bank of America had refused to comment on speculation that it was considering a sale of its stake in Beijing-based CCB, which is majority-owned by the Chinese government.
Bank of America`s shares jumped 5.3% in mid-morning trading after it announced the sale, though their price is still down more than 15% over the past month and more than 38% since the beginning of the year.
Investors have been dumping the bank`s stock amid fears that its legal woes and the sluggish US economy would prevent it from raising enough capital to meet the Basel III standards imposed after the financial crisis.
The bank got a major boost on Thursday when billionaire Warren Buffett said he would invest USD 5 billion in BofA and strongly endorsed the bank`s embattled management team.
The sale of CCB shares will further improve Bank of America`s capital ratios, the bank said, helping to allay concerns that it is under capitalised and not moving quickly enough to meet the Basel III rules.