Parlophone, the record label behind Kylie Minogue, Coldplay and Blur, is to be sold as a condition of EMI's takeover by Universal, it has been reported.
The European Commission, which is expected to sign off Universal's £1.2 billion acquisition of EMI this week, has been concerned that the world's biggest music company will be too powerful if it swallows EMI whole.
The Sunday Times said the concession from Universal to offload EMI's Parlophone arm will interest potential buyers such as German media giant Bertelsmann and Mute, the indie label behind Goldfrapp and Moby.
As well as Parlophone, EMI's other record labels include Virgin Records and EMI Records. Its takeover by Universal, which is home to artists from Take That to the Rolling Stones, has been opposed by many independent record labels.
Universal, which is led by Londoner Lucian Grainge, is expected to raise between 250 million euros (£200 million) and 300 million euros (£240 million) from the sale of Parlophone and other smaller labels.
EMI, which also owns the Abbey Road studios, was taken over by US bank Citigroup in 2011 after its private equity owner Terra Firma was unable to keep up with interest payments.
It has also agreed the sale of its music publishing arm, which collects royalties from broadcasting of music on television and radio, to a Sony-led consortium.