The sale includes Intel’s solid-state drive, NAND flash and wafer businesses, and a production facility in Dalian, China.
The deal will make SK Hynix one of the world's largest NAND memory makers.
Intel had been weighing getting out of the business for some time, driven by sagging prices for flash memory, according to The Wall Street Journal, which first reported the possible sale on Monday.
The market for memory chips slumped in 2018 amid an oversupply of the devices, though it began to recover late last year. Analysts expect the market for NAND devices to remain strong in the coming years as data storage surges, the Journal noted.
"This transaction will allow us to further prioritize our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to our stockholders," said Intel CEO Bob Swan in a statement.
The company said it “intends to invest transaction proceeds to deliver leadership products and advance its long-term growth priorities, including artificial intelligence, 5G networking and the intelligent, autonomous edge.”
Intel will keep its Optane line of memory products under terms of the deal.
Intel shares rose 0.37% to $54.78 in premarket trading Tuesday. The stock has fallen 8.8% so far in 2020.
The chipmaker is scheduled to report earnings Thursday after the closing bell.
Analysts surveyed by FactSet expect Intel to report third-quarter earnings of $1.11 a share on revenue of $18.24 billion.