The CoE has been under increasing pressure to disinvest in the controversial Indian mining company after it refused to halt plans on construction of an open-cast bauxite mining project on the Niyamgiri mountains in the Orissa state of India.
Activists believe the mining project will destroy the spirituality of the mountain, threatening the region's ecosystem, and the future of the 8,000-strong Dongria Kondh tribe. The tribe's livelihood depends on the hills for crops and water, and the tribals regard the mountain and surrounding forest as a sacred area.
Protests against Vedanta's plans to build one of the biggest bauxite mines to feed its aluminium smelters have been joined by celebrities including British actress Joanna Lumley and Bianca Jagger.
Vedanta chairman Anil Agarwal defended the company's Niyamgiri project last year, saying it would bring huge investment to an impoverished part of the country and create many jobs there.
"We are disappointed by the Church of England's decision to sell their holding in Vedanta," said a spokesman, adding that the company "remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights".
India's environment minister admitted in August that the project should never have been approved.