It is being bought by a consortium whose members include two private equity firms and one of Canada's largest public sector pension funds.
The Ontario Teachers' Pension Plan Board invests the retirement funds of the province's current and ex-staff.
Bell Canada has about 18 million customers and 54,000 staff.
'Huge value'
It generated sales of more than US$16bn last year.
The firm was the subject of a fierce bidding war involving a number of private equity operators as well as Telus, Canada's second largest phone company.
The winning consortium includes Providence Equity Partners and Madison Dearborn Partners, both US businesses.
The deal is being structured to meet Canadian laws capping foreign ownership of shares in the flagship firm to 47% of its total equity.
"This is a huge amount of value delivered to our shareholders," Bell Canada's chief executive Michael Sabia said of the deal.
The transaction must be approved by Bell Canada investors as well as federal regulators before it can proceed.