Macmahon shareholders will vote on the sale of the company's construction assets to Leighton Holdings at a general meeting on February 26 in Perth.
Macmahon said the purchase is expected to be worth $A23.9 million.
The company said in a statement on Friday night that its independent directors unanimously recommend that its investors vote in favour of the proposed transaction with Leighton, as they will be better off after the sale.
Macmahon chairman Ken Scott-Mackenzie said the sales provides certainty for Macmahon as it moves towards becoming a dedicated full service mining contractor.
"The proposed transaction with Leighton allows Macmahon to focus on pursuing our strategy of growing and developing our successful mining operations, in line with our new strategic direction," Mr Scott-Mackenzie said.
"Our construction business was not positioned to be competitive or deliver sustainable earnings in the future due to its insufficient scale, high overheads, and challenges in attracting and retaining key management personnel.
"By selling the majority of our construction projects, we will be able to focus on building the strength and reputation of our mining operations, which reduces our risk profile and is expected to deliver more consistent and sustainable earnings."
On January 14 Macmahon rejected a rival offer from India-owned Sembawang Australia.
"The independent directors gave thorough consideration to the Sembawang approaches and unanimously rejected them upon considering all aspects of their proposals, including the limited information provided by Sembawang," Mr Scott-Mackenzie said.
"To walk away from the certainty of the transaction with Leighton in the hope of doing a better deal with Sembawang based on a highly conditional, indicative proposal is an unacceptable risk which is considered not to be in the best interests of our shareholders."
Macmahon shares closed on Friday 5.5 per cent lower at 26 cents, before the announcement was made.