Uber is selling its driverless car subsidiary to start-up Aurora Technologies and a deal has been signed in this connection.
Uber's founder once hailed the unit as critical to the future of the firm.
Aurora, founded in 2017, in a statement said the deal will help it "accelerate" its mission to make self-driving cars a reality.
Uber will invest $400m in the Amazon-backed company, giving it a 26% stake.
Its chief executive Dara Khosrowshahi will also serve on Aurora's board, following closure of the deal.
Despite the sale of its driverless car subsidiary known as Advanced Technologies Group, Uber said it remained interested in the sector, with plans to collaborate with Aurora when it comes to launching driverless cars on its network.
"Few technologies hold as much promise to improve people's lives with safe, accessible, and environmentally friendly transportation as self-driving vehicles," Mr Khosrowshahi said.
Developing driverless technology was a key priority when Uber's founder and former chief executive Travis Kalanick was leading the ride hailing firm, since he saw it as a way to reduce costs.