BHP Billiton also said Tuesday a review of its 80 per cent stake in the Canada's first producing diamond operation, the Ekati mine in the Northwest Territories, was also ongoing but no buyer has yet emerged.
"Potential transactions arising from the review will be subject to detailed analysis before a final decision is made," the company said.
"In the event that its criteria are not met, BHP Billiton will continue to operate Ekati in a sustainable manner."
Vancouver-based Peregrine said Tuesday it will pay $9 million plus a two per cent royalty on future production for Chidliak in the southeast part of the Nunavut island. Peregrine currently owns a 49 per cent stake in the exploration project and is its operator.
"BHP Billiton's decision to review its diamonds business has presented Peregrine with an excellent growth opportunity," Peregrine chief executive Eric Friedland said in a statement.
"A 100 per cent stake in Chidliak, one of the world's leading diamond exploration projects, at a time when diamond supply shortfalls are on the horizon and world-wide demand for diamonds continues to grow, offers us complete flexibility on how this project will be developed in order to maximize shareholder value."
Peregrine said it will now begin weighing its options on how to proceed at Chidliak.
Tim Cutt, president of BHP Billiton's diamonds and specialty products business, said Peregrine was the natural owner for the project.
"Peregrine has been a good partner and we believe they are a strong operator that is well positioned to advance this promising exploration opportunity," Cutt said in a statement.
The deal is expected to close by the end of January.
BHP announced last month that it was reviewing its diamond holdings. Chief among them is Ekati, which employs about 1,400 people in a remote part of the north, and is the global resources company's only operating diamond mine.
BHP owns 80 per cent of Ekati and two geologists who discovered kimberlite deposits that hold the diamonds own the rest. The mine began operations in 1998 and has been a source of jobs and economic growth for business and aboriginal communities in the Northwest Territories.
The company has said Ekati holds about three per cent of the world's rough diamond supply by weight and about nine per cent by value.
But BHP, which operates aluminum, coal, metals and other resources projects around the world, has said it feels there are few options to develop new diamond mines that will become long-life producers consistent with a strategy of keeping its projects simple and scalable.