Berlin/Zurich, Sep 10 (DPA) Giant US carmaker General Motors (GM) Thursday announced plans to sell off 55 percent of its European offshoot Opel to a consortium led by the Canadian-Austrian auto parts group Magna International.

The decision on GM's European subsidiary was sealed by the German government-backed trust overseeing Opel's day-to-day affairs.

'We reached a decision in the advisory board today which we believe is in the best economic interests of Opel/Vauxhall and their employees,' said the head of the Opel trust, Fred Irwin.

The announcements came after GM held a two-day board meeting in Detroit, and follows months of uncertainty surrounding the fate of Opel, which has about half of its 50,000 European workforce in Germany.

German Chancellor Angela Merkel welcomed GM's decision, which she said was 'in line with the wishes of the federal government' and represented 'a new beginning for Opel'.

The deal, under which all four German Opel factories are to remain in operation, brought relief to Merkel less than three weeks before Germany's general election.

Under the proposals announced by GM Europe in Zurich, GM is to retain 35 percent of the newly established Opel company. A further 10 percent is to be held by the Opel workforce.

Magna's 55-percent share of Opel is to be split half-way with Russian state-owned Sberbank, part of the consortium alongside Russian carmaker Gaz.

The German government has backed the Magna-led bid for a majority stake in Opel and said it would provide 4.5 billion euros ($6.5 billion) in state-backed guarantees to help Magna restructure the GM European subsidiary.

Negotiations over the Opel sale were set to continue according to GM's chief negotiator, company Vice President John Smith, who at a press conference in Berlin expressed certainty that the right decision had been made.

Smith said the Belgian operations in Antwerp were likely to close under the terms of the deal.