A debt-stricken Malaysian company linked to corruption allegations swirling around Prime Minister Najib Razak said Monday it would sell its power assets to China's biggest nuclear energy producer for $2.3 billion.

Malaysian state-owned 1Malaysia Development Berhad (1MDB) said it had agreed to sell Edra Global Energy Berhad to China General Nuclear Power Corporation in a deal expected to be executed by February.

1MDB, an investment company launched by Najib, has been the subject of official inquiries following allegations that more than a billion dollars had gone missing from overseas transactions it was involved in.

1MDB denies any missing funds.

The scandal intensified in July when it was revealed that nearly $700 million in 1MDB-linked money had been deposited into Najib's personal bank accounts.

Facing calls to step down, Najib has denied wrongdoing but has never fully explained what happened.

Inquiries have stalled after he fired his attorney-general in July and after police raided the Malaysian anti-corruption agency's offices in August.

1MDB is estimated to be saddled with $11 billion in debt from an overseas energy asset buying spree that has been widely questioned.

Its woes rattled Malaysian markets after it missed a number of debt repayment deadlines, stoking fears that it could collapse under its debt or require a bailout.

An originally-planned initial public offering of Edra -- which includes electricity-generation assets across the Middle East and Southeast Asia -- was eventually cancelled amid the swirling allegations.

1MDB subsequently announced plans for an outright sale of Edra earlier this year, part of a "rationalisation" plan to help pay off debts.

The Chinese company will buy Edra's assets in cash and assume its debt, 1MDB said in a statement.

"This transaction marks the achievement of the first major milestone in the 1MDB rationalisation plan," the statement quoted 1MDB CEO Arul Kanda as saying.

Malaysia's central bank has previously said it had formally recommended in August that criminal proceedings be launched against 1MDB, but that Najib's newly-appointed attorney general dismissed the call.

With domestic investigations by Malaysia's longtime government now in doubt, Najib appears to have blunted a push to oust him.

But regulators in the United States and other countries are reportedly looking into the affair, with authorities in Switzerland and Singapore saying they had frozen some accounts as they probe possible money-laundering and other crimes.

Malaysia's opposition has said the case lays bare rampant corruption under the 58-year-old government and its manipulation of government institutions to thwart justice.