 The fuel Sasol produces is derived predominantly from coal |
Sasol said it will sell the stake worth about 17.9bn rand ($2.4bn; £1.2bn) to black staff, investors and key partners in the biggest BEE deal to date.
The government programme aims to redress the worst distortions of wealth created by the apartheid regime.
Sasol's announcement coincided with the release of annual earnings, up 10%.
South Africa's BEE legislation has come under fire in the past for enriching people in the right political circles, leading to accusations of government cronyism.
But Sasol insisted that this transaction was "ground-breaking, not only in terms of its size, but also in terms of its overarching ambition to create a legacy of building skills and capacity in the South African economy."
A new image
In an interview with the BBC World Service, Sasol chief executive Pat Davies added: "The deal brings into the mainstream of the economy, people who were previously disadvantaged... and who probably wouldn't have been shareholders in a company like Sasol.
"It's great for the development of our economy. The better the economy does we, as a fairly significant player in the local market, benefit as a result."
If approved by shareholders, the transaction will be implemented in 2008, the Johannesburg-based firm said.
Sasol's image has traditionally been of a white, male-dominated corporation that grew rich during the apartheid years and therefore was often targeted by anti-apartheid campaigners for sanctions.
But since Mr Davies took the post of chief executive two years ago, the company has undergone a rapid pace of change, with more diversity apparent in senior management.
Deal terms
Under the terms of the deal, 3% of Sasol's shares will be earmarked for the black public, mainly black staff will be able to buy 4% and 1.5% will be available for strategic partners, such as unions and suppliers.
The rest will be owned by the Sasol Foundation, which will be created to offer skills development to South Africa's most disadvantaged, particularly women.
Funding for the stake will be provided by Sasol and bank loans and the shares must be held for a set period before they can be sold.
Separately the company said a weaker rand to the dollar and higher oil prices boosted headline earnings per share.
But further profits growth was hindered by maintenance shutdowns at its gas-to-liquids plant in Qatar.
