United Airlines has pulled out of the London-New York route, regarded as among the most profitable in the world.It has sold its route authority for direct flights between the two cities to Delta Air Lines for up to $21m.
The sale is subject to approval by the US Department of Transportation.
United will end its London-New York service when its winter schedule come in on October 27.
Delta plans to operate a daily service between the two cities starting later this year. It will add a second daily service in the spring of 2007.
United currently runs a daily service between London Heathrow and JFK. It declined to say what will happen to this slot at Heathrow.
Under the Bermuda II agreement, United is one of only four airlines allowed to operate a Heathrow-New York service. The others are BA, Virgin Atlantic and American Airlines.
United will continue to operate its daily services form Heathrow to Chicago, Washington, San Francisco and Los Angeles.
The airline which is now out of Chapter 11 bankruptcy protection, will concentrate on routes out of America to the Far East.
John Tague, United's executive vp and chief revenue officer, said: "By focusing on the strength of our hub network, United and our customers will benefit from our increased Asia Pacific service, including our first-ever Asia Pacific service from Washington Dulles."
Delta said the agreement with United marked a "milestone in a decade-long effort to expand to London from JFK."
Jim Whitehurst, the carrier's chief operating officer, said: "Our customers have long awaited the addition of daily nonstop Delta flights on the world's most popular international route.
"Airline consumers will benefit from the increased competition these flights will generate."
United parent company, UAL announced a second quarter profit for 2006 of $119m, compared with a loss for the same period in 2005.
It was the first second quarter profit United, which came out of Chapter 11 protection in February, had enjoyed since 2000.
Increased fares and load factors helped raise United's revenue for the three month period by 16% to $5.11bn.
The airline said that the robust demand for travel and cuts in operating costs had "more than" offset the 31% rise in fuel prices.
* see BTE Analysis