TOKYO—Suzuki Motor Corp. has agreed to sell its 1.5% stake in Volkswagen AG to Porsche Automobil Holding SE, the German auto maker's biggest shareholder, Suzuki and Porsche SE said Saturday, without disclosing the transaction price.

Suzuki, which holds the stake in Volkswagen as a part of a failed partnership with the German auto maker, will transfer the shares to Porsche SE on Wednesday, the Japanese auto maker said in a statement. As a result of the sales, Suzuki will post ¥ 36.7 billion (US$304 million) in special profit, it said.

Porsche Automobil Holding SE manages assets held by the Porsche and Piech families—descendants of Ferdinand Porsche, the inventor of the Volkswagen Beetle—and controls more than 50% of Volkswagen's voting stock.

The agreement largely ends a failed tie-up between Volkswagen, one of the world's biggest auto makers, and Suzuki, a second-tier Japanese auto maker focusing on small cars, following four years of arbitration.

Over the past week, Volkswagen has lost a third of its value in the wake of an emissions scandal involving its diesel cars. Despite the plunging stock price, Suzuki said this week that it still intended to shed its stake in Volkswagen.

In late 2009, the two companies struck a deal to cooperate in emerging markets, and work together on the development of fuel-efficient small cars. As a part of the deal, Volkswagen purchased a 19.9% stake in Suzuki, while Suzuki acquired a 1.5% stake in Volkswagen.

Last week, Suzuki repurchased its own shares from Volkswagen for about ¥ 429 billion, following an order in August by The London Court of International Arbitration. The court also said that Suzuki had breached the alliance agreement, and Suzuki has said it may have to pay damages to Volkswagen.

William Boston in Berlin contributed to this article.

Write to Yoko Kubota at yoko.kubota@wsj.com

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September 27, 2015 20:55 ET (00:55 GMT)