General Electric Co. said it plans to sell up to 20% of its majority holding in oil services company Baker Hughes, providing around $4 billion in cash for the struggling conglomerate.

GE GE, +2.63% will sell up to 101 million shares in a secondary offering to the market and Baker Hughes BHGE, +2.73% has agreed to repurchase about 65 million shares from its controlling shareholder. Based on Monday’s closing price of $23.64, the sales would raise roughly $4 billion for GE.

GE had been prevented from selling its stake in Baker Hughes until July 2019 as part of the agreement that formed the company, when GE combined its oil and gas business with Baker Hughes. GE said it plans to maintain a stake above 50% in Baker Hughes after the transactions.

GE had told investors in June it planned to sell down its 62.5% stake in Baker Hughes as part of a restructuring plan to raise cash and breakup the conglomerate. Investors have worried about the company’s high debt load and losses in its core power division. GE has also agreed to sell its locomotive business and spin off its health-care unit. The agreement with Baker Hughes announced Tuesday marks the first major portfolio move by Chief Executive Larry Culp, who took over on Oct. 1 and has tried to reassure investors that he is putting the company on the path to growth after two years of turmoil.

An expanded version of this report appears at WSJ.com.