The decay Ξ−b → Λ0bπ− is observed using a proton-proton collision data sample collected at center-of-ffiffimass energy √s = 13 TeV with the LHCb detector, corresponding to an integrated luminosity of 5.5 fb-1. This process is mediated by the s → uu-d quark-level transition, where the b quark in the Ξ−b baryon is a spectator in the decay. Averaging the results obtained using the two Λ0b decay modes, Λ0b → Λ+c π− and Λ0b → Λ+c π−π+π−, the relative production ratio is measured to be of E-b =fA0b thorn f(Ξ−b)/f(Λ0b)B(Ξ−b → Λ0bπ−) = (7.3 ± 0.8 ± 0.6) x 10^(-4). Here the uncertainties are statistical and systematic, respectively, and f(Ξ−b)(fΛ0b) is the fragmentation fraction for a b quark into a Ξ−b (Λ0b) baryon. Using an independent measurement of f(Ξ−b)/f(Λ0b), the branching fraction B(Ξ−b →Λ0bπ−) = (0.89 ± 0.10 ± 0.07 ± 0.29)% is obtained, where the last uncertainty is due to the assumed SU(3) flavor symmetry in the determination of f(Ξ−b)/f(Λ0b).