Pearson did not provide a valuation, but according to a recent report in the FT predicting the sale, it was expected to generate around €20m (£15m).
The transaction, which will increase Gruner & Jahr's stake in FT Deutschland to 100%, is subject to regulatory approval and is expected to complete in the first quarter of 2008. It includes arrangements for the FT to license the Financial Times brand and FT content to FT Deutschland.
FT Deutschland was launched in 2000 and now has a circulation of approximately 105,000.
Pearson's share of the gross assets of FT Deutschland was approximately €8m at December 31 2007.
Rona Fairhead, chief executive of the Financial Times Group, said: "We are incredibly proud to have played a part in launching and building a leading business newspaper in Germany.
"However, the FT Group is increasingly focussed on the worldwide expansion of the Financial Times and our digital financial information businesses.
"FT Deutschland no longer fits within that strategy, but we are very pleased to have found such a good home for a great newspaper."
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