Liberty Steel is looking for a buyer for its aerospace and steel business in Stocksbridge, outside Sheffield, as part of a major restructuring, the business announced on Monday.
The firm has been in financial difficulties since the collapse of Greensill Capital and has repeatedly asked for aid from the government.
When the financing company went into administration, its lawyers revealed that it had around five billion dollars (£3.5 billion) of exposure to Liberty's parent company GFG Alliance.
Liberty Steel employs nearly 2,000 workers at sites in Rotherham, Stocksbridge and Scunthorpe. It has 5,000 workers across its 12 UK sites.
Liberty said that the restructuring of its business would protect thousands of jobs.
The aerospace and special alloys steel business in Stocksbridge is "a unique, high-quality business servicing marquee customers in aerospace, auto and other highly engineered applications," the business said.
However, it is not a core part of Liberty's Greensteel plan to create more environmentally-friendly steel.
By selling, Liberty hopes it can focus on scaling up its plant in Rotherham to make two million tonnes of green steel.
The company also said it has started a formal sale process for Coventry's Liberty Pressing Solutions, and Liberty Aluminium Technologies, with sites in Essex and Kidderminster.
It will also try to sell its manufacturing facilities in Brinsworth, South Yorkshire, and in West Bromwich. Between them all, the plants for sale employ around 1,500 people.
The plant will make use of some of the millions of tonnes of steel scrap currently exported by the UK to make more of the quality steel needed in the UK, which is currently being imported," Liberty said.
Ross Murdoch, GMB National Officer, said: "GMB held with meetings with Liberty/GFG Alliance this morning.
"Sanjeev Gupta pledged no steel plants would close on his watch and we expect him to honour that promise.
"As ever, the devil will be in the detail and we await specific information with regards to the proposed sales."
The National Trade Union Steel Coordinating Committee said: "Stocksbridge and its downstream plants are strategically important businesses vital to our country’s defence, energy and aerospace sectors.
"The future for these businesses must be secured and the trade unions will hold Sanjeev Gupta to his promise that none of our steel plants will close on his watch.
"Liberty must act as a responsible seller and run a transparent sales process which fully engages the trade unions."
Miriam Cates, the MP for Stocksbridge, told ITV News that she thought the sale could be a "great thing" for the area if the right buyer is found.
She said: "Obviously it is a really worrying time for Stocksbridge and everyone who works in the plant and it comes off the back of a worrying time for the last couple of months. But I think this is better than going into administration, which we feared."
The Shadow business secretary Ed Miliband said: "It's absolutely vital the Government and Liberty secure legal assurances that the Stocksbridge plant, which is a British asset supplying our aerospace and defence industries and providing good jobs, will remain open and the workforce will be protected.
"Crucially we also need assurances about all of Liberty's other plants. The Government must show it has a plan B to protect the long-term future of our steel industry, including at Liberty - and public ownership must remain an option on the table."
The Secretary of State for Business, Kwasi Kwarteng, said in March that the British Government is not willing to give financial support to Liberty Steel as the owners of the company have "opaque" finances.
In April the Prime Minister told ITV News that the government was talking daily to management at Liberty Steel over financial issues.