By Ian Walker

LONDON--No. 2 U.K. grocer J Sainsbury PLC (SBRY.LN) said Wednesday it has entered into a partnership with Lloyds Pharmacy owner Celesio AG (CLS1.XE) under which it will sell its pharmacy business to Lloyds and get an annual rent back for each site.

Sainsbury's is selling its pharmacy business, which includes 281 sites in total, to Lloyds for 125 million pounds ($193.95 million). It didn't disclose how much rent it will get for each location.

The deal is expected to be complete by the end of February next year, subject to regulatory conditions being satisfied, Sainsbury's said.

-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749

Subscribe to WSJ: http://online.wsj.com?mod=djnwires