DETROIT — It’s a done deal. After eight months of discussions, General Motors has agreed to sell its medium-duty truck division to Navistar International — the North American market leader in class 5 to 7 trucks.

Navistar will take over GM’s Kodiak and TopKick nameplates. GM, however, will continue its relationship with Isuzu to market W-Series trucks.

The deal, which also includes related service parts businesses, is expected to close in 2008.

Financial terms of the agreement weren’t immediately announced. But analysts say that GM’s medium-duty business — which made nearly 60,000 trucks last year and controls 12 percent of the mid-range market — is valued at $500 million.

When a deal is definitively concluded, production of the vehicles would move from GM’s plant in Flint, Mich., to a Navistar facility to be named. GM would retain ownership of its Flint plant and continue to build other products at the facility.

“This is another example of how we’re strategically growing our business for trucks, engines and parts, building scale and reducing costs,” said Daniel C. Ustian, chairman, president and CEO, Navistar International Corporation. “We are proud to incorporate the GM truck brands into our portfolio, and will utilize the scale to build on the success of both the International and GM product lines and their respective distribution networks.”

GM has been saying for a while that it intends on re-focusing on making cars and light trucks.

In a recent financial report, Navistar indicated that it would invest as much as $100 million in the GM division if it were to buy it.

It’s been said that Navistar, which is currently in a bitter supply relationship with Ford for the latter’s F-series diesel engines, has been on the lookout for a new partnership or acquisition.

The two sides have been ordered by a U.S. court to settle their longstanding dispute. It’s unclear at this time how the GM agreement affects Navistar’s already shaky partnership with Ford.

Reportedly, Ford has been developing its own diesel engine for F-Series pickups and other vehicles for production in North America for 2009 or 2010.

Market analysts at New York-based Bear Stearns suggest that even if Navistar won’t immediately replace the Duramax 6.6L diesel with its own 6.4L engine, there could be an opportunity to sell larger displacement engines into GM eventually.

“Such a deal could help Navistar plan for ‘life after Ford,’ should that relationship sour further.”