The Brazilian miner has signed a divestment contract with the outgoing Indonesian government, to sell the stake to Indonesian parties within five years.
Under a new agreement with the government, Vale will reduce its mining-area size to 190,510 hectares from the previous 118,435.
The company has also agreed to pay more than double existing royalties to the government, from 0.9 per cent to 2 per cent.
The royalty will be upped to 3 percent with a nickel-price increase.
Vale Indonesia president director Nico Kanter said: “Vale believes that with this amendment, the company is well positioned to contribute to the development of Indonesia and continue to create shareholder value.”