News Corp's board on Friday approved the break-up of the conglomerate into two independent companies, separating the high-flying entertainment assets from the struggling newspaper operations.
The decision, which sets a date for the split for June 28, all but assures the implementation of a plan proposed last year by News Corp chief Rupert Murdoch.
It must also be approved next month by shareholders, but the Murdoch family holds a majority of the voting shares.
"Today's announcement is a significant step in creating two independent companies with the world's leading portfolios of publishing and media and entertainment assets," said Murdoch, who will be chairman and chief executive of 21st Century Fox, and executive chairman of the new News Corporation.
"We continue to believe that the separation will unlock the true value of both companies and their distinct assets, enabling investors to benefit from the separate strategic opportunities resulting from more focused management of each division."
One company will focus on news and publishing, to retain the News Corp name, and another on television and film, to be called 21st Century Fox.
The split spins off the publishing operations, which have been hit by the slump in the newspaper industry, from the more profitable entertainment assets.
The company announced the restructuring last June, a move partly seen as a nod to shareholders angered by the reputational damage and costs inflicted by a phone hacking scandal in Britain, and partly because of troubles within the group's publishing arm.
The new News Corporation will include newspapers in Britain, Australia and the United States, including The Wall Street Journal and The Times of London. It also includes digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia.
Doug Mitchelson at Deutsche Bank said the new News Corp faces "structural challenges" but added that "investors may be surprised how little of its value the 'troubled assets' represent," and maintained that "management is working diligently to revitalize them."
The 21st Century Fox unit includes the Fox studios in Hollywood and a global array of cable and broadcasting networks and properties, including Fox broadcasting and cable operations, National Geographic Channels, Fox Pan American Sports, MundoFox, STAR, and 28 local television stations.
It has pay-TV services in Europe and Asia, including Sky Deutschland, Sky Italia and stakes in BSkyB and Tata Sky.
Analyst Benjamin Swinburne at Morgan Stanley said that after the split, Fox will hold an attractive asset portfolio with the pricing power to drive subscription fees in the US, with content and distribution assets globally that tap into rising international pay-TV penetration."
The board approved the distribution of one share of the new News Corporation for every four shares of the existing company.
The board also authorized a $500 million stock repurchase program for the new News Corporation following the separation and a shareholder rights, or "poison pill," plan to make a hostile takeover more difficult.
Under the poison pill, existing shareholders of News Corp could buy new shares at a discount if any buyer acquires more than 15 percent of the company. This would make a takeover more expensive.
The company said in March the newspaper and publishing side will begin operations with $2.6 billion in cash and that it was looking at "possible acquisitions and dispositions of certain businesses."
In December, Murdoch named close confidante Robert Thomson, an Australian, as the new boss of the newspaper and publishing empire.
News Corp shares rose 0.65 percent to $33.07.