DaimlerChrysler said on Friday it had sold its MTU aero engine business to US private equity firm Kohlberg Kravis Roberts & Co in the car maker's latest step to shed non-core assets, Reuters reported.

The German company declined to give a price for the sale, reported by Reuters last week, but sources close to the transaction have said that Daimler would sell the unit to KKR for €1.45 billion ($US1.7 billion).

The sale, to be completed by the end of December, will give a welcome boost to the bottom line of the world's fifth biggest car maker as it struggles to return its US Chrysler unit to long-term profits, the news agency noted.

"It is right for Daimler to sell what they are not actively managing and what they don't want to invest in," Juergen Pieper, an analyst at Metzler Bank in Frankfurt told Reuters, noting however that this was not the best time to get a high price.

Reuters said MTU, which makes turbines and other parts for several engine types, is one of the last non-core assets DaimlerChrysler has to sell - the business has over 8,300 employees globally and had sales of about €2.2 billion last year.

Reuters noted that, in July, Italy's Fiat agreed to sell its Fiat Avio aviation unit to The Carlyle Group and state-controlled defence firm Finmeccanica in a bid to cut its heavy debt load.