New Zealand dairy giant Fonterra announced it is selling its farms in China for a total of NZ$555 million ($367.97 million) in an attempt to further pay down debt and retreat from overseas expansion.

"Selling the farms will allow us to focus even more on strengthening our Foodservice, consumer brands and ingredients businesses in China," Miles Hurrell, Chief Executive Officer of ‎Fonterra said in a statement on Monday.

Two farming-hubs located in Ying and Yutian will be sold to China Youran Dairy Group for NZ$513 million. Beijing Sanyuan Venture Capital is set to acquire an 85 percent stake in the Hangu farm for NZ$42 million.

The deals are waiting for regulatory approvals in China. Fonterra is expecting the sale to complete within its financial year ending in July 2021.

The company reduced its debt by more than 1 billion New Zealand dollars ($675.40 million) as of September after it unveiled plans last year to halt global expansion.

The world's largest dairy exporter ships around a quarter of its production to China and started building farms in the country in 2007 as a way to tap into the country's  fast-expanding appetite for dairy products.

The size of China's dairy products market exceeded 400 billion yuan (US$59 billion) in 2019 and is expecting to top 550 billion yuan (US$81 billion) by 2024, according to research firm Euromonitor.

Fonterra is planning to expand in China, its largest market. The company, which sells dairy products under brands like Anchor and Anlene, is investing in a new research and development site in Shanghai, and plans to establish a new application center in central China' Wuhan in 2021.