HP said its shareholders would own a stake in both businesses through a tax-free transaction next year.
Shares of the company, which has struggled to adapt to the new era of mobile and online computing, rose 6.3 percent to $37.40 in premarket trading on Monday.
Each of the two businesses contribute about half of HP's current revenue and profit.
The move will result in a monumental reshaping of one of technology's most important pioneers, which still has more than 300,000 employees and is on track to book $112 billion in revenue this fiscal year.
The printing and personal computing business, to be known as HP Inc, will be led by Dion Weisler, currently an executive in that division.
HP's current chief executive, Meg Whitman, will lead the new Hewlett-Packard Enterprise, which will house the corporate hardware and services operations. She will also be chairman of HP Inc.
Current HP lead independent director Patricia Russo will be chairman of the enterprise company.
Founded by Bill Hewlett and Dave Packard in a Palo Alto, California garage in 1939, HP was one of the companies that shaped Silicon Valley and the PC revolution.
Lately, however, it has struggled to adapt to the shift towards mobile computing, and it has been overshadowed by younger rivals.
The announcement on Monday confirmed a report of the split in the Wall Street Journal on Sunday.
HP is the latest in a line of companies, often under shareholder pressure, to spin off operations in an attempt to become more agile and to capitalize on faster-growing businesses.
Last week online auction company eBay said it would spin off PayPal.
Up to Friday's close, HP's stock had risen nearly 26 percent this year.
© Thomson Reuters 2014
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