The Alstom board voted on Tuesday to approve a €12.35 billion bid for its energy arm by US group General Electric over a rival offer from German engineering giant Siemens.
The offer was approved after the board met following an announcement by Siemens that it had decided to make an offer for the energy wing of the French engineering company, which is also known for making TGV trains.
A statement from Alstom said the influx ofcash would allow the group to "concentrate on its transport activities for which it is a global leader" and to repay its debt, which amounts to €3 billion. Shareholders would also get a bonus.
The offer will now be examined in detail over the nexxt month by an independent committee, whi will take into account the interests of all stakeholders, including the French state, Alstom's board said.
The fate of the French group was suddenly put into play last week when it emerged that it was in advanced talks with GE.
News that the company, which has been termed a French "national jewel", could fall into American hands provoked an angry response from French Economy Minister Arnaud Montebourg.
He reproached Alstom head Patrick Kron in strong terms for not informing the government of takeover talks, accusing him of deliberately keeping him in the dark.
French Prime Minister Manuel Valls said Alstom was "of national strategic importance" and stressed the government would keep a watchful eye over offers.
However some analysts say the French government are simply making a lot of "noise" becasue the issue is so sensitive but deep down they accept that Alstom's shareholders will ultimately decide its fate.
Earlier on Tuesday, Siemens said it had decided to make an offer to Alstom but gave no details of its intended bid.
But the German behemoth said it was conditional on it being granted access to the French company's books and the green light to quiz management.
According to a preliminary proposal sent at the weekend to Alstom, seen by AFP but not confirmed by the German company, Siemens offered to buy Alstom's energy business and give the French giant part of its train activities in return.
In a letter to the French presidency Tuesday, a copy of which was seen by AFP, GE stressed its desire to create a "world leader in energy in France" and create jobs in the country
France's Financial Markets Authority (AMF) called on Alstom to make known the details of the offers before the bourse opens on Wednesday.
A national jewel