Nissan Motor Co Ltd will hand over its business in Russia to a state-owned entity for 1 euro ($0.97), it said on Tuesday, taking a loss of around $687 million in the latest costly exit from the country by a global company.

The Japanese automaker transferred its shares in Nissan Manufacturing Russia LLC to state-owned NAMI, it said. The deal will give Nissan the right to buy back the business within six years, Russia's industry and trade ministry said.

The Nissan deal was "of great significance for the industry," Russia's Industry and Trade Minister Denis Manturov said in a statement.

The deal makes Nissan the latest major company to leave Russia since February. Several automakers have left Russia or paused their business in the country, including Volkswagen which stopped its operation in Russia in March.

Nissan's top shareholder, French automaker Renault, also sold its majority stake in Russian carmaker Avtovaz to a Russian investor in May.

The sale to NAMI will include Nissan's production and research facilities in St. Petersburg as well as its sales and marketing center in Moscow, the ministry said.

Nissan said it expected an extraordinary loss of around 100 billion yen ($687 million), but maintained its earnings forecast for the financial year ending in March.

Renault, which owns 43 percent of Nissan, estimated the decision by its Japanese partner would lead to a 331 million euro hit to its net income for the second half of 2022.

Nissan suspended production at its St. Petersburg plant in March due to supply chain disruptions. Since then, the company and its local unit had been monitoring the situation, it said. But there was "no visibility" of a change to the external environment, Nissan said, prompting it to decide to exit.

Junior alliance partner Mitsubishi Motors Corp is also considering exiting Russia, the Nikkei newspaper said.

A spokesperson for Mitsubishi said nothing had been decided.

The exit comes as Nissan has embarked on a major shift in its relationship with Renault. The two said on Monday they were in talks about the future of their alliance, which could include Nissan investing in a new electric vehicle venture by Renault.

Renault reportedly sold its stake in Avtovaz for one rouble ($0.02).

(Source: Reuters with edits)