TORONTO -- The selloff of Nortel continued with today's announcement that the floundering telecom firm would sell its corporate networking business to Avaya for $915 million.

The terms include $900 million in cash and $15 million for an employee retention program, and is expedted to close in the fourth quarter, Nortel said. US regulators will have to approve the deal. 

Corporate networking is Nortel’s second-largest unit in terms of sales, with annual revenues of about $2.4 billion. 

The deal is not without controversy. Verizon -- a major customer -- is claiming the sale would would constitute a threat to US national security by putting at risk "communications networks critical to the operation of the federal government, and the defense, safety, health and security of the American public." 

Nortel is in Chapter 11 bankruptcy protection, and has been selling various pieces, including its carrier network division and research operations for $650 million to Nokia Siemens Networks and its wireless infrastructure business for a proposed $1.13 billion to Ericsson.

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