Uber’s self-driving unit, Advanced Technologies Group (ATG), is being acquired by its start-up competitor Aurora Innovation, the companies announced Monday.The deal, expected to close in the first quarter of 2021, values ATG at approximately $4 billion. The unit was valued at $7.25 billion in Apr. 2019 when Softbank, Denso and Toyota took a stake.Uber CEO Dara Khosrowshahi will join the company’s board, and the ride-sharing giant will invest $400 million into the company.Overall, Uber and ATG investors and employees are expected to own a 40% stake in Aurora, according to a regulatory filing accompanying the deal; Uber alone will hold a 26% stake. The start-up is being valued at $10 billion in the transaction, according to a person familiar with the terms of the deal.”With the addition of ATG, Aurora will have an incredibly strong team and technology, a clear path to several markets, and the resources to deliver,” Chris Urmson, co-founder and CEO of Aurora, said in a statement. “Simply put, Aurora will be the company best positioned to deliver the self-driving products necessary to make transportation and logistics safer, more accessible, and less expensive.””Few technologies hold as much promise to improve people’s lives with safe, accessible, and environmentally friendly transportation as self-driving vehicles,” said Khosrowshahi in a statement. “For the last five years, our phenomenal team at ATG has been at the forefront of this effort—and in joining forces with Aurora, they are now in pole position to deliver on that promise even faster.”Aurora is backed by Hyundai, Amazon and major venture firms including Greylock and Sequoia. TechCrunch first reported in November that the two companies were in talks for ATG.Uber’s co-founder and former CEO Travis Kalanick had viewed self-driving as an essential investment, saying in 2016 he believed the world would shift to autonomous vehicles. ATG had been a long-term play for Uber, but the unit brought high costs and safety challenges. Throughout the course of a pandemic-stricken year, Uber has made efforts to stem losses in its ride hailing business, control business costs — including with major layoffs in the spring — and to grow its delivery business.Earlier this year, Uber stirred up controversy by transferring Jump, its electric bike sharing subsidiary, to Lime — another micro-mobility company in which the ride hail giant had invested. Uber acquired Jump outright in 2018 with the stated intention of running and growing that brand independently.– CNBC’s Lora Kolodny contributed to this report.Subscribe to CNBC on YouTube.