Guardian Media Group, owners of The Guardian and The Observer, has severed its historic ties with Manchester by selling its regional media arm to rival media organisation Trinity Mirror.

The sale, for £44.8m, includes the Manchester Evening News as well as southern titles including the Reading Post. GMG, which posted a pre-tax loss of  £89.8m last year, is desperate for money but will make only £7.4m in cash from Trinity. The rest of the deal comes from Trinity releasing GMG from a £37.4m print contract.

The sale of the Manchester Evening News will have been a painful decision for GMG, given that its national daily title started life as The Manchester Guardian. The group's CEO Carolyn McCall said: "The Manchester Evening News and its sister titles have made a huge contribution to the fortunes of the group for the best part of a century."

But GMG's regional arm has seen its income tumble with the loss of advertising and profits fell to £500,000 last year from £14.3m in the year to March 2008. With GMG suffering losses of £100,000 a day the group felt that it could no longer afford to retain an interest in the ailing regional press.