The housebuilding business operates across England and Wales and completed 2,042 units in 2018.
The group felt that Kier Living had limited operational synergies with other parts of the group and would require significant ongoing funding to deliver future growth.
It has determined that Kier Living is non-core and begun a process to sell the business.
Kier has received a number of inbound expressions of interest in Kier Living in recent weeks.
It has also concluded that the investment requirements of its property development business, Kier Property, are incompatible with the group’s capital requirements.
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It will, therefore, accelerate a reduction in the amount invested into the business and this may extend to its sale.
Andrew Davies, chief executive at Kier, said: “As previously announced, I have been leading a strategic review which has resulted in the actions being announced today.
“These actions are focused on resetting the operational structure of Kier, simplifying the portfolio and emphasising cash generation in order to structurally reduce debt.
“By making these changes, we will reinforce the foundations from which our core activities can flourish in the future to the benefit of all of our stakeholders.”