The 68.62% holding in Rossing Uranium Ltd, the owner of the mine, will be sold to China National Uranium Corp Ltd.
The deal is expected to be completed in the first half of 2019, subject to approval by the Namibian Competition Commission.
READ: Rio Tinto to raise US$3.5bn from sale of its production stake in the world's second-biggest copper mine
Rio will receive an initial cash payment of US$6.5mln and a further US$100mln contingent payment, which is linked to uranium spot prices and Rossing’s net income during the next seven calendar years.
“The sale of our interest in Rössing once again demonstrates our commitment to strengthening our portfolio and focusing on our core assets, which deliver sector-leading returns in the short, medium and long-term,” said chief executive Jean-Sébastien Jacques.
As part of its strategy to offload non-core parts of the business, Rio agreed to sell its remaining coal mine in Australia to private equity manager EMR Capital and Indonesia's Adaro Energy Tbk for US$2.25mln in March.
In July it announced that it would sell its 40% production Grasberg, the world's second-biggest copper mine, to Indonesia's state mining company PT Inalum for US$3.5bn.