The Chinese smartphone maker has announced plans to sell its youth-focused budget brand, admitting it has been under "tremendous pressure" due to "a persistent unavailability of technical elements".
In a statement, the company explained: "This sale will help Honor's channel sellers and suppliers make it through this difficult time."
Honor is being sold to Shenzhen Zhixin New Information Technology, a new company set up for the purpose of the acquisition.
The news comes amid increasing pressure being put on Huawei from the US government, with President Donald Trump suggesting it poses a threat to national security.
Huawei has repeatedly denied those accusations, but under the current system, foreign semiconductor firms are required to secure a permit before selling chips to Huawei if they are developed using American technology.
Huawei claims the sale is designed to salvage the brand, despite the problems created by the restrictions in the US.
The company - which established Honor back in 2013 - explained in a statement: "This move has been made by Honor's industry chain to ensure its own survival."