Oct. 1--Bank of America Corp. said Wednesday it will sell part of its Columbia Management unit, an idea that it first outlined in May after the federal government told it to shore up capital.

The Charlotte bank will take in about $1billion for selling part of Columbia, which includes long-term mutual funds, to Ameriprise Financial Inc., a financial planning company based in Minneapolis.

The sale follows similar moves in recent years by some other large banks, and the price was in line with what analysts had predicted. But the sale, which is expected to close in the spring, also represents the beginning of the end for Bank of America's effort to offer its own mutual funds as part of a "supermarket" of financial products.

With this purchase, Ameriprise will increase its assets under management by about 70 percent, to about $400 billion. Investors rewarded the company, sending its shares up more than 12 percent. Bank of America's shares fell about 1 percent.

As an asset manager, Columbia provides products like mutual funds to institutions and individuals. Bank of America had built one of the nation's biggest mutual fund families, largely through acquisitions; it took the Columbia name from FleetBoston Financial Corp., which it bought in 2004.

Analysts have known since the spring that Columbia's days as a Bank of America unit were numbered.

In May, after the federal government stress-tested the country's biggest banks and told Bank of America to shore up $33.9 billion in capital, chief executive Ken Lewis confirmed that the bank was shopping Columbia. He said the unit, which is based in Boston, was redundant with the services offered by asset manager BlackRock. The bank had acquired about a 50 percent stake in BlackRock when it bought Merrill Lynch & Co. on Jan. 1.

Though the bank met the government's demands months ago, that didn't change its plans for Columbia, which was smaller and less profitable than BlackRock.

Although Columbia turned a profit in the second quarter, it fared poorly last year and into the first quarter of this year, losing more than $500 million in five quarters. BlackRock remained a moneymaker, with the New York firm earning $306 million in the first six months of this year.

Ameriprise will buy Columbia's long-term asset management business, which represents about $165 billion in assets under management -- about half of Columbia's total. As for the unsold parts, Bank of America said it "continues to consider alternatives" for the cash investments, or short-term asset management business, currently managed by Columbia.