The deal leaves Hollinger International holding only the Chicago Sun-Times and North American local papers out of its former portfolio of publishing assets.
It has been selling these since July when it sold the Telegraph Group to the Barclay brothers for £665m after acrimoniously parting company with its chief executive, Lord Conrad Black of Crossharbour, last year.
The sum raised from the sale is less than the $21.5m Hollinger International is reported to have paid to acquire the Jerusalem Post over 1989 and 1990, and less than the $56m it spent up to October in the legal pursuit of Lord Black.
The Jerusalem Post will be 50% owned by Mikaei Tikshoret and 50% by Canada's CanWest Global Communications when the sale goes through, which is expected to be in December.
While it is a loss-making newspaper, the English-language publication, which was set up 16 years before the formation of Israel in 1948, is influential in the Middle East.
Tikshoret also owns radio and television stations in Israel and publications in Hebrew and Russian.
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