Fonterra chief executive Miles Hurrell yesterday confirmed the sale to Froneri, saying it was a "bittersweet moment'' for the co-operative.
The price was about $100million above book value, which will lift earnings by 6c per share, Fonterra said.
Rumours had been circulating last year that it might be up for sale as the dairy co-operative looked to streamline its operation and reduce debt.
In December, Fonterra confirmed it was on the market, saying it had "reached maturity'' as an investment.
News of the potential sale was met then with outrage from some Fonterra suppliers, including Taranaki farmer Matthew Herbert who announced an online petition.
Yesterday, Mr Herbert acknowledged the price it fetched was "phenomenal''.
"In the end, [Miles Hurrell] did what (sadly) had to be done and exceeded expectations. So credit where its due, good work [Fonterra],'' he tweeted.
In a statement, Mr Hurrell said he understood the connection New Zealanders had with Tip Top - a brand established 83 years ago - and it would be important for them to see that it was in good hands.
"It's been a privilege being the guardians of Tip Top but it's time to hand the baton to new owners.
"The well-loved brand needs continuing investment and focused ownership to be sustainable for generations to come. It's not something we're in a position to do right now,'' he said.
Froneri was created in 2016 as a joint venture between PAI Partners and Nestle.
It was the second-largest manufacturer of ice-cream in Europe and the third-largest worldwide, employing more than 10,000 people and with revenue of 2.5 billion ($NZ4.2billion) in 2017.
Froneri chief executive Ibrahim Najafi said the Tip Top name and its operations, including the Auckland-based factory site at Mount Wellington, would be maintained.
The agreed settlement date was May 31 and, while there would be a transition period over a number of months, it would be "very much business as usual''.
Tip Top employees would transfer across to become part of Froneri, the statement said.
Fonterra had signed an agreement with Froneri to supply milk which ensured Fonterra farmers would "continue to be part of the Tip Top story''.
Fonterra also retained full global ownership of the Kapiti brand and would be licencing its use for ice-cream to Froneri.
In March, when the co-operative announced its interim results for the first half of the 2019 financial year, Mr Hurrell said it was "well on track'' to reduce end-of-year debt by $800million.
At that time, chairman John Monaghan stressed that a full review of its business strategey was not "mere tinkering around the edges'' and there would be fundamental change.
Regarding other divestments, Mr Hurrell said that, while Fonterra has "other one-off transactions that are under way but not yet completed, such as the potential sale of DFE Pharma, it is too early to assess the overall impact of the co-op's divestment programme on its FY19 earnings.'' - Additional reporting BusinessDesk
