GM sells stake in Opel
Under the plan, Magna - with Russian bank Sberbank - will own 55% of New Opel, GM will retain 35%, while employees will have a 10% stake.
GM says that a definitive agreement to sell should be ready to sign within a matter of weeks, while the deal should be closed 'within the next few months'.
To finalise the deal, GM says it will need confirmed written support from unions, as well as a definitive finance package from the German government.
Fritz Henderson, GM President and CEO: 'We thank all parties involved in the intensive process of the last few months - especially the German government - for their continued support that enables this new venture.
'I'd also like to thank the Opel and Vauxhall customers for their continued loyalty. GM will continue to closely collaborate with Opel and Vauxhall to develop and produce more great cars, such as the new Insignia and the new Astra.'
Opel employs a total of 54,500 workers across Europe, with 25,000 based in Germany.
Its Vauxhall brand employs 5,500 people in the UK, primarily at its two British plants in Luton and Ellesmere Port.
Business Minister, Pat McFadden, said: 'Our objective throughout has been to get the best possible outcome for the Vauxhall workforce and the production plants in the UK.
'We have been in close contact with all parties throughout including GM in the US and Europe and all the potential bidders.
'Now GM has announced its preferred bidder is Magna. We will now continue our discussions with Magna: they have told us of their commitment to continuing production at both Ellesmere Port and Luton and we will work to make sure we get the best possible outcome for the UK.'
Unite's joint general secretary, Tony Woodley, said: 'The uncertainty surrounding the ownership of Vauxhall is now over, but the uncertainty surrounding the long term future of Britain's plants will continue.
'One of the alternatives could have been the unthinkable position of liquidation. Nevertheless, with Magna as the new owner, we need to make sure that British plants and people are not treated disproportionately during the restructuring that will take place.
'With that in mind, the union and the government will no doubt continue to negotiate with Magna.
'We expect financial support from the UK government for Magna to be dependent on the job and plant commitments given by the company.'
German Chancellor Angela Merkel said: 'I am very pleased about the decision that's been made and it is along the lines that the federal government has been advocating. But it's also along the lines that the employers and the employees of Opel wanted.'