Kina Bank is a subsidiary of Kina Securities Limited, a PNG company listed on the Australian and Port Moresby securities exchanges.
In a release, ANZ said its agreement to sell allows it to "focus solely on Institutional and Large Corporate banking in the market".
It said the move is also in line with ANZ's simplification strategy, while also supporting customers with trade and capital flows in the region.
The sale includes all 15 ANZ branches with ongoing roles for all relevant staff in PNG.
The businesses being sold serve 85,000 retail and 6,000 Commercial and SME customers, and includes US$110 million in lending assets and US$335million in deposits.
NZ Managing Director, Institutional Australia, Graham Turley said the ANZ remains committed to running a world class Institutional and Large Corporate banking business in PNG.
He said ANZ sees great opportunities for growth in PNG, where it has been involved for more than a century.
Mr Turley said ANZ will continue to service multinational corporations and large corporates operating in PNG.