Eastman Kodak Co. has announced that it has agreed to sell its online photo services to Shutterfly for $23.8 million.

Under the agreement, the users of Kodak’s gallery will be transferred to Shutterfly, which is a leading Internet-based social expression and personal publishing service. Kodak Gallery permits users to upload photos, organize galleries, order prints and share pictures. Shutterfly has stated that it will allow customers to opt out of the transition if they do not want their photos to be transferred.

This sale is consistent with our objective of focusing Kodak on a core set of businesses in which we can most profitably leverage our technology and brand strengths, and provides a well-proven mechanism for ensuring that Kodak receives maximum value from these assets, said Pradeep Jotwani, Kodak’s President, Consumer Businesses and Chief Marketing Officer. KODAK Gallery is a unique property, with more than 75 million users, and an ability to attract new members through innovative customer offerings such as its category-leading popular mobile apps, he added.

Kodak will be seeking the U.S. Bankruptcy Court approval of sale and auction procedures by late March. It has detailed its plans for bankruptcy restructuring in a 136-page filing with the U.S. Securities and Exchange Commission. Kodak lost $764 million in 2011 and $687 million in 2010.