Europe's biggest carmaker has its own in-house leasing business, VW Leasing GmbH, which made it harder to justify the 50 percent stake it has had in the third-party leasing business since 2004 amid cost cuts and a refocusing of the group.

Volkswagen is aiming to make annual savings of 5 billion euros by 2017 at its VW passenger car brand to close a profitability gap with rivals such as Toyota.

Founded in 1963 and now the world's largest lease fleet management company, LeasePlan operates in 32 countries, has 6,800 employees and manages 1.42 million vehicles. It made a net profit of 372 million euros in 2014.

LeasePlan said it expects the sale to a consortium comprising Dutch and Danish pension funds, the sovereign wealth funds of Singapore and Abu Dhabi, Goldman Sachs and private equity firm TDR Capital to be concluded by the end of 2015, subject to approval from the Dutch Central Bank and the European Central Bank.

The consortium will make an equity investment of around half the purchase price, with the rest to be funded by a 480 million euro mandatory convertible note and a 1.5 billion euro debt facility. LeasePlan will not be responsible for the debt.

Dutch pension fund manager PGGM said the consortium wanted to support LeasePlan management's plans to expand, which would remain an independent company.

People familiar with the matter had told Reuters previously that VW was in advanced talks to sell the business for roughly 3 billion euros.

(Reporting by Georgina Prodhan in Frankfurt; additional reporting by Thomas Escritt in Amsterdam; editing by Noah Barkin and Jason Neely)