German firm Mutares will take on the French online retailer, but Dixons Retail Group will have to pay around 69 million euros (£58 million) as a dowry to support ongoing funding of the business.
Dixons shares jumped 8% as the disposal should enable it to focus on its more successful UK and Ireland operation, which posted another strong performance with like-for-like sales up 6% in the three months to July 31.
PIXmania's woes have acted as a drag on the wider group, with the division slumping into the red with losses of £31.3 million in the year to April 30.
It is also selling another loss-making business by offloading ElectroWorld of Turkey to one of the country's biggest electrical retailers for up to £2 million.
Chief executive Sebastian James said the deals will allow Dixons to stick to what it does best.
He added: "I am a passionate believer that Dixons succeeds where we offer our customers an integrated multi-channel proposition, where we are the market leader and that we do best when we stick to our knitting."
Mr James said PIXmania would benefit from an "injection of entrepreneurial vigour" from its new owners.
He cheered a "good start" to the new financial year, but added a note of caution over recent signs of a marked pick up in the wider economy.
"Despite some reports of improved economic conditions, we remain cautious on the state of the market for the year ahead," he said.
Nick Bubb, independent retail analyst, said the group's move to sell PIXmania and ElectroWorld meant the "dream scenario of an unencumbered UK recovery is very much on the cards".
The sell-off of PIXmania sees Dixons throw in the towel after a concerted effort to turn the business around, having taken full control of the division for £8 million in August last year.
It has since launched a major overhaul of the firm, including withdrawing from almost half the countries where PIXmania operated and the closure of all bricks-and-mortar stores.
But trading has failed to improve, while losses have mounted.
Dixons first bought a majority stake in PIXmania in 2006 for 266 million euros, then equivalent to £185 million.
Woes at PIXmania have been offset by a resurgent performance in the UK and Ireland, which saw profits jump 39% to £113.3 million in the year to April 30 as it benefited from self-help measures and the collapse of competitors such as Comet.