Shell said the the sale of 71.6 million shares would produce pre-tax proceeds of about $US1.7 billion (A$2.2 billion).
Royal Dutch Shell PLC (LON:RDSB) has disposed of its entire stake in Woodside Petroleum after being swamped by demand for the shares by institutional shareholders.
That represented 13.28 percent of Woodside shares and the entirety of SEHAL's shareholding in the company, it said.
Shell Chief Financial Officer Jessica Uhl said the "sale is another step towards the completion of our three-year USD30 billion divestment programme, which is an important part of our strategy to reshape Shell, to deliver a world class investment case, and to strengthen our financial framework".
Shell "A" shares were up 0.7% on Monday at 2,435.00 pence, with "B" shares up 0.7% at 2,475.00p.
Earlier this month, Shell said it had managed to earn more than $25 billion from non-core asset sales under its programme ending next year.
Analysts at investment bank Tudor, Pickering, Holt & Co said that Shell's $30 billion target "is easily within reach and we see the potential for this to be increased at the Management Day" on November 28. Shell was blocked from taking over Woodside by then Treasurer, Peter Costello in a bid worth $US5.1 billion.
Shell will remain joint venture partner in two liquefied natural gas projects in Australia, according to Woodside.