Confirming widespread speculation, the Rupert Murdoch-led company said that it will create two distinct publicly-traded firms over the next year.
The move is thought to be part of News Corp's plans to restructure its business after the highly-damaging UK phone hacking scandal.
The publishing unit would include News Corp's global portfolio of newspapers, including The Times, The Sun, the Australian and the New York Post, alongside Dow Jones Newswires, the Harper Collins book publishing group and News Corp's education business.
The media and entertainment division would house the firm's pay-TV and movies operations, including Twentieth Century Fox, the Fox Broadcasting Company, Sky Italia, the 39.1% stake in UK broadcaster Sky, National Geographic Channel and Shine Group, the production outfit founded by Murdoch's daughter Elisabeth and acquired by News Corp last year.
Murdoch would act as chairman of both businesses, along with being chief executive of the entertainment company.
The person who will lead the struggling publishing business has not yet been announced, but News Corp said that it will assemble management teams and boards of directors for both businesses over the "next several months".
A key issue for Murdoch will be where he places his three adult children associated with News Corp. It is expected that James and Elisabeth Murdoch will be attached to the entertainment company, while oldest son Lachlan could be placed with the publishing company.
"There is much work to be done, but our board and I believe that this new corporate structure we are pursuing would accelerate News Corporation's businesses to grow to new heights, and enable each company and its divisions to recognise their full potential - and unlock even greater long-term shareholder value," said Rupert Murdoch, currently the chairman and chief executive of News Corp.
"News Corporation's 60-year heritage of developing world-class media brands has resulted in a large and unparalleled portfolio of diversified assets. We recognise that over the years, News Corporation's broad collection of assets have become increasingly complex.
"We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe.
"I am 100% committed to the future of both the publishing and media and entertainment businesses and, if the board ultimately approves a separation, I would serve as chairman of both companies."
The move would also help to placate investors who have expressed concern about the actions of the board after the hacking affair and called for greater focus on the parts of News Corp that make the most money.
However, the continuing level of control the Murdochs will have over both businesses will most probably not please some shareholders.
News Corp said that the separation of each business's financial and operational structure would allow investors to "more clearly evaluate the inherent value of both portfolios of assets and invest in each company accordingly".
After the split, News Corp shareholders will receive one share of common stock in the new company for each same class share they currently hold.
Each listed company will maintain two classes of common stock: Class A Common and Class B Common Voting Shares.
News Corp expects the business separation to be completed within approximately 12 months and work on the transition will commence once the proposal gets final approval from the company's board of directors.
A meeting will be held in the first half of 2013 for shareholders to consider the transaction, while the move will also need to get regulatory and tax approvals before it can be completed.