The investment committee's 5-0 approval sends the proposal to the full board for review Wednesday, said Adam Rosenthal, student regent on the 26-member board.
If the board approves the committee's recommendation, the proposal will receive an up or down vote when the board meets again in January, Rosenthal said.
The 10-campus university system has some $4 billion invested in retirement funds and numerous companies across the world.
Student groups pushing for divestment identified at least four companies that have invested in Sudan that are among UC's portfolio, including oil giant PetroChina Co. Ltd.
Rosenthal estimated that tens of millions of dollars would be divested, but said the total amount was still being studied.
Stanford University and Harvard University already have divested money from companies doing business with Sudan, where civil war and alleged government genocide have claimed the lives of more than 180,000 since 2003.
To put down rebel violence in the western Darfur region, Sudanese authorities are accused of unleashing militias known as the Janjaweed, fanning a major humanitarian conflict.
The UC system in 1986 made a significant divestment by withdrawing $3 billion in investments from South Africa to protest the apartheid government then in power. It also has sold tobacco company positions.