Fonterra's stake in China's Beingmate has dropped by one per cent to 17.8 per cent following a series of transactions.
According to Shenzen Stock Exchange data, the sales took place within a range of 5.28 to 6.71 yuan.
That equates to an average exit price of 5.58 yuan per share, against Fonterra's 2015 purchase price of 18 yuan per share.
The co-op said in August that it was winding back its relationship with Beingmate and that it was looking to reduce its financial stake.
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"Yes, we have sold a portion of our stake, which is the equivalent of 1 per cent of Beingmate," a spokesperson for the co-op said.
"We announced in August that we would start the selldown, so that's what we have done over the last month or two," she said.
Fonterra has already written down the investment by more than $430 million.
The sell-down is part of Fonterra's three-point plan to turn around its business, which last year recorded its biggest ever loss of $605m.
Fonterra paid NZ$755m for its stake in Beingmate as part of a joint venture arrangement.
Under Shenzhen Stock Exchange rules it is only possible to sell up to 1 per cent every 90 days directly on the exchange, or sell up to 2 per cent in a single block every 90 days.
However, trades greater than 5 per cent can be made to an individual party in an off-market transaction.
Fonterra has already unwound its joint venture arrangement with Beingmate, taking back full ownership of the Darnum manufacturing plant in Australia.
When Fonterra invested in Beingmate in 2015 it said the deal would give access to the lucrative Chinese market for its infant formula and other products.
Beingmate originally had sole rights to distribute Fonterra's popular Anmum brand in China but that ended as the two companies fell out over strategy and governance issues.
Fonterra's NZ-listed units last traded at $4.17, up from their lowest ever point of $3.15 in August.
Beingmate shares have also been on the improve, trading at 6.12 yuan from their August low point of 4.94 yuan.