 Food shortages have become an all too regular occurrence |
The state will buy Heinz's 49% stake in Olivine Industries, which makes cooking oils, fats and soaps, for $6.8m.
Rampant annual inflation of more than 7,600% has crippled the economy and firms failing to reduce prices face the threat of possible nationalization.
Heinz has been present in Zimbabwe for more than 25 years.
Goods shortages
The firm, best known for its baked beans and tomato ketchup, was one of the first foreign businesses to invest in the country after its independence in 1980.
Zimbabwe's ever-spiralling inflation, the highest in the world, has put basic goods beyond the reach of much of the population and made life perilous for foreign investors.
In an effort to try and get to grips with the economic crisis, the government intervened last month to prohibit any future price rises and freeze public sector pay.
The change in Olivine's ownership will see Cottco, the state-controlled cotton buying and processing enterprise, take control of the business.
"This acquisition will add critical mass to the company while allowing the company to diversify from its traditional revenue streams and operating risks," said Pius Manamike, Cottco's company secretary.
The government-controlled Herald newspaper said Heinz had been scaling back production over the past year to comply with US economic sanctions against Zimbabwe.
However, company executives said it had been forced to reduce its output and focus on exports because of Zimbabwe's worsening domestic situation.
New laws which would force foreign-owned businesses to sell a majority stake in their operations to black-owned Zimbabwean firms are set to come into force within months.
Officials said the Olivine deal had been under discussions for some time and pre-dated the planned shift in ownership rules.
