News Corp's board voted unanimously to approve the plan after the firm revealed it was considering the split earlier this week, The Wall Street Journal said.
The decision is yet to be confirmed by the global media giant, but a statement is expected to be released later, the News Corp-owned newspaper reported.
The move will see the group's 39% stake in broadcasting giant BSkyB (LSE: BSY.L - news) , the parent company of Sky News, separately listed from the embattled UK newspaper arm News International (NI).
NI has been the focus of the phone hacking scandal that led to the closure of News Corp's News Of The World tabloid paper.
On Tuesday, News Corp said it was "considering a restructuring to separate its business into two distinct publicly traded companies", prompting its shares to jump as much as 8% on Wall Street.
In London, BSkyB shares raced 3% higher amid market speculation that the split will raise the possibility of News Corp reviving its plans to take full control of BSkyB.
It had to scrap a deal to buy the remaining stake of BSkyB in the wake of the phone hacking scandal, but a restructuring has the potential to effectively quarantine the scandal-hit papers from the rest of the group and pave the way for the deal to be resurrected.
The move will see News Corp's film and television businesses - including 20th Century Fox and the Fox broadcasting network - grouped in one company.
The other company would hold all News Corp's publishing interests, such as The Wall Street Journal, The Times, The Sun, The Australian, The New York Post and publisher HarperCollins.
The entertainment arm would be by far the bigger operation, with the publishing division hindered in recent years by tough media market conditions and costs related to the UK phone hacking scandal.
News Corp was rocked by the hacking debacle, with Rupert Murdoch and his son James Murdoch coming under heavy fire.
A report by a committee of MPs (BSE: MPSLTD.BO - news) claimed Rupert Murdoch was "not a fit person" to run an international company following an inquiry by the Commons Culture Committee investigating the News Of The World scandal.
James Murdoch resigned as chairman of BSkyB in April admitting he had become its "lightning rod", just weeks after he quit as boss of News International.
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