Goldman Sachs Group Inc. has decided to close its principal-strategies unit, which does proprietary trading, in the wake of financial-overhaul regulation passed by Congress, according to a person familiar with the matter.

The widely expected decision follows J.P. Morgan Chase & Co.'s decision this week to close its proprietary-trading business. That bank started telling its proprietary traders earlier this week that it would exit that part of the business.

Proprietary trading, which involves putting a company's own capital at risk in trades, is now a relatively small part of the two companies' operations. An analyst at Citigroup has estimated that Goldman Sachs Principal Strategies has shrunk in the past three years and generates less than 1% of the company's overall trading revenue, or about $100 million to $200 million a quarter. Virtually all of Goldman Sachs' proprietary trading is done in the principal-strategies unit.