Conglomerate BCE Inc. is selling most of its more than 25 per cent stake in information technology firm CGI Group Inc. for $859 million and plans to sell the remaining $242 million worth next year.

The sale boosts the coffers at Montreal-based BCE, which announced in early December it was selling a major stake in Bell Globemedia for $1.3 billion in cash.

CGI said Friday it will buy back 100 million of its Class A shares at $8.59 each, equal to their volume-weighted average price for the past 20 trading days on the Toronto stock market.

And BCE said it will extended outsourcing agreements that will see CGI remain Bell Canada’s preferred information technology supplier until 2016.

“We believe that investing in CGI is the best use of our financial resources,” CGI chairman and CEO Serge Godin said in a statement.

“Bell is one of CGI’s most valued customers and CGI is one of Bell Canada’s leading clients, together forming a key strategic partnership to deliver integrated solutions to our Canadian clients.

“The extension of our outsourcing agreements reinforces our relationship and provides CGI with an important source of recurring revenues as well as $1.1 billion of additional backlog.”

BCE, the parent of Bell Canada, said the sale price represents an annualized return on investment of about 14 per cent.

After a 120-day standstill period from closing, BCE said it will sell its remaining 28.3 million shares, valued at about $242 million.

BCE, which will recognize an accounting gain related to the sale of about $80 million in the first quarter of 2006, said it decided to sell its stake in CGI after a review of assets found “it was no longer strategically essential.”

“Given the decision to exit our stake in CGI, the sale of the majority of our shares directly to CGI was the most efficient and economical means of realizing value from our investment,” said BCE president and CEO Michael Sabia.

CGI will finance the acquisition price through cash on hand and debt.