The proposed $800 million deal was announced Monday morning by Empire Co. Ltd., Sobeys' parent company.
Farm Boy will be managed separately from Empire's broader operations, according to a media release from Empire.
Empire chief executive Michael Medline says the company is hoping to double the size of the Farm Boy business.
The deal, which is expected to close in early 2019, is meant to ramp up Farm Boy's face in the GTA and southwestern Ontario through new stores and Sobeys store conversions.
Under the deal, Farm Boy will be set up as a separate company and continue to be led by co-CEOs Jean-Louis Bellemare and Jeff York, who have both agreed to reinvest in the company in return for a 12 per cent interest of the continuing Farm Boy business.
"We do not want to ruin the magic of Farm Boy by trying to integrate them", he said on the conference call. Some Sobeys stores may be converted to Farm Boys.
The first Farm Boy location opened in Cornwall in 1981.
"I assure you, nothing will change", Bellemare said in the conference call. Empire will provide help with logistics and real estate, Medline said in the call. "We are going to hit it out of the park in Toronto", York told analysts.
Medline said Farm Boy has a winning formula, calling it a "jewel of an asset".
Farm Boy, the Ottawa-based grocery chain, is being sold to the owner of Sobey's.
However, it's unclear how much things will change at the popular Ottawa stores known for their fresh produce, locally-sourced products and ready-to-eat prepared foods.
There are 14 Farm Boys in Ottawa.