Woolworths' hotels arm is selling more than $600 million worth of liquor stores and pubs in a deal that will see it lease them back for the next 20 years.
ALH Group, which is 75 per cent owned by Woolworths, will sell 54 sites, including a number of pubs and 46 Dan Murphy's or BWS stores, to property giant Charter Hall.
The deal will see ALH receive $603 million, with Woolworths agreeing to lease the sites back for the next two decades.
Woolworths indicated it may use the proceeds of the sale to pay down debt.
Chief executive Grant O'Brien said the company preferred to lease, rather than own, its sites.
"The transaction is consistent with Woolworths' strategic priority to act on our portfolio to maximise shareholder value," he said.
"Woolworths and ALH's preference is to enter into long-term leases over its premises rather than holding property assets."
Charter Hall said the properties were high quality assets with strong rental incomes.
