Trinity Mirror, owner of The Birmingham Post, will return £175 million to shareholders through a share buyback programme.
It is also topping up pension funds to the tune of £108 million.
The proceeds from the sale of the Racing Post and some regional titles brought in £263 million earlier this year, and the company has been in discussions with the Pensions Regulator.
Clearance for the share buyback was secured by agreeing to make one-off payments into the newspaper group's defined benefit pension schemes and the company said it remained committed to funding the remaining deficits over time.
At the half-year to July 1, Trinity Mirror's pension deficit stood at £154.2 million.
The share buyback, which will start immediately, reflected the board's confidence in the group's ongoing cash flow, the company said in a statement.
It stated: "Trinity Mirror announces that it is immediately commencing a share buyback programme to the value of £175 million following clearance from the Pensions Regulator for a return of capital to shareholders.
"This is part of the planned capital reorganisation which follows the group's review of the business and the disposal of certain businesses.
"To secure clearance from the Pensions Regulator Trinity Mirror has agreed to make immediate one-off payments totalling £108 million into the group's defined benefit pension schemes.
"The group remains committed to funding the remaining deficits in its defined benefit pension schemes over time.
"The share buyback is more than £30 million higher than the net proceeds from the disposal of the sports division and seven sub regions in the South (after deduction of the pensions contribution) and reflects the board's confidence in the group's ongoing cash flows.
"The group's strong balance sheet after this return of capital will provide continuing financial flexibility for investment to create shareholder value going forward.
"The share buy-back programme will continue through the close period, utilising the existing authority granted by shareholders at the 2007 AGM to repurchase 10 per cent of our issued share capital.
"At such time as additional authority becomes necessary the directors will seek that authority in a general meeting."