TD Bank has agreed to sell its 10.1% stake in investment firm Charles Schwab for about C$20 billion (US$14.6 billion) after taxes.
The bank says it will put C$8 billion of the funds toward share buybacks, with the rest ploughed back into the Canadian business as it seeks to fuel organic growth.
The sale is part of a strategic review at TD after it agreed to pay more than $3 billion in penalties after pleading guilty to violating US anti-money laundering federal laws.
The bank is also facing a cap on the size of its US retail banking business, affecting its ability to generate earnings growth.
The Schwab deal is the first major move for new CEO Raymond Chun, who took over this month in the wake of the retirement of Bharat Masrani, who left after a 10 year stint following the US settlement.