The split, which was reported by the Wall Street Journal over the weekend, will see HP's Enterprise Group, Enterprise Services, Software and HP Financial Services divisions combined into a new business, Hewlett-Packard Enterprise.
At the same time the existing Printing and Personal Systems Group, comprising HP's commercial and consumer printing hardware, printing supplies and personal computing systems (including notebooks, desktops and workstations), will be spun off into another new company, HP Inc, which will retain the current HP logo.
HP Inc will be headed by current executive vice president of the Printing and Personal Systems Group Dion Weisler, who has been named chief executive of the new entity; HP chief executive Meg Whitman will become chairman of HP Inc and chief executive of Hewlett-Packard Enterprise.
Whitman said: "Since assuming responsibility for the Printing and Personal Systems Group, Dion and his leadership team have done an excellent job of building our relationships with customers and channel partners, segmenting the market and driving product innovation. The creation of HP Inc will only accelerate the progress the team has made."
Weisler added: "This is a defining moment in our industry as customers are looking for innovation to enable workforces that are more mobile, connected and productive while at the same time allowing a seamless experience across work and play.
"As the market leader in printing and personal systems, an independent HP Inc will be extremely well positioned to deliver that innovation across our traditional markets as well as extend our leadership into new markets like 3D printing and new computing experiences – inventing technology that empowers people to create, interact and inspire like never before."
The separation of the firm's PC business was last proposed by former chief executive Leo Apotheker in 2011; however, the plan was dropped following pressure from shareholders, leading to Apotheker's departure.
Following her appointment, Whitman led a reorganisation in 2012 that saw the PC business combined with the Imaging and Printing Group (IPG) to create the Printing and Personal Systems business, helping pave the way for the current separation plan.
In its 2013 full-year results, HP's Printing and Personal Systems Group reported a net revenue of $55.9bn and pre-tax earnings of $4.8bn. Based on reported segment revenue and operating profit for the past 12 months to the end of Q3 2014, HP said that the new HP Inc would be a $57bn turnover business, with 41% of its revenues coming from printing, with an operating margin of 9% and an operating profit of $5bn.
Meanwhile, HP said that it had identified an additional 5,000 job cuts as part of its previously-announced restructuring programme, taking the total to 55,000 (of which 36,000 have already been made).
HP said the additional job cuts were independent of the separation transaction and that the net incremental savings from increasing the total headcount reduction by 10% would be used to fund investment opportunities in R&D and sales in its 2015 financial year.
Shareholders have responded positively to the news, pushing HP's share price up 4.6% to $36.82 at the time of writing.
