The transaction is part of a new joint venture between MGM Growth Properties (MGP) and BREIT.
MGM is set to receive $2.4bn in net cash proceeds and another $85m in MGP operating partnership units.
Additionally, MGP has agreed to pay MGM up to $1.4bn of MGM’s existing operating partnership units.
These transactions will give MGM net cash proceeds of approximately $8.2bn when taking into account the sales of the Bellagio and Circus Circus late last year.
MGM Resorts International CEO Jim Murren said: "These announcements represent a key milestone in executing the company's previously communicated asset-light strategy, one that enables a best-in-class balance sheet and strong free cash flow generation to provide MGM Resorts with meaningful strategic flexibility to create continued value for our shareholders."
BREIT will lease MGM Grand and Mandalay Bay to MGP for a rent of $292m at the offset.
The joint venture gives MGP a 50.1% ownership, with BREIT owning the other 49.9%.
Blackstone president Jon Gray said: "This transaction reflects our continuing strong conviction in Las Vegas. We are pleased to once again partner with MGM Resorts, a world-class operator, as well as MGM Growth Properties."
