International Airlines Group (IAG), the owner of BA , said it was now talking with a number of airlines about alternative options.
It added that the split, which will come into force at the end of March 2013, would not have any negative impact on its financial targets.
IAG chief executive Willie Walsh said: "We're ending the joint business on amicable terms and support Qantas' decision to work with Emirates.
"The world has changed since 1995 when the joint business started. This is a small part of our overall network and this move fits in with changes in our global strategy.
"Asia has become a key market focus for IAG and we're talking to a number of airlines about alternative options for us."
Qantas's new deal will see it replace Singapore with Dubai as its hub for European flights from March 2013 and coordinate pricing, sales and schedules with Emirates under the 10-year partnership.
"A key objective is to make Qantas International strong and viable, and bring it back to profitability," Qantas chief executive Alan Joyce told reporters. "This partnership will help us do that."
Joyce said the airline remained committed to reaching break-even in its international business in the 2015 financial year.
He declined to comment on analysts' estimates that the alliance would save Qantas A$90m to A$100m (£64m) before taxes annually, or provide the airline's own forecasts for cost savings.
The long-anticipated deal was received warmly by investors, with Qantas' share price surging more than 6pc in early trade.
The arrangement will enable Qantas to cut loss-making international routes and focus on its profitable domestic and budget operations, while helping Emirates compete against from its main state-backed Abu Dhabi rivals Etihad Airways and Qatar Airways.
The alliance is deeper than a straightforward code-share arrangement - where airlines share some flights - but stops short of a global revenue-sharing deal or equity injection from either side.
For customers, benefits include the pair sharing airport lounges and frequent flyer programs.
It helps Qantas, nicknamed the Flying Kangaroo, confront its disadvantage in the region as a so-called "end-of-line" carrier. Qantas has to spend more on fuel than other airlines in Asia to carry passengers on inter-continental routes as its aircraft are based in Australia.
Qantas will drop its Frankfurt route as part of the deal.
The Australian airline has been stripping costs out of its business after a year troubled by a record fuel bill, rising competition and a labour union that has opposed the carrier's spending cuts.
It last month cancelled orders for 35 Boeing Dreamliner jets to further cut costs after posting a full-year net loss of A$244m , its first loss in 17 years, due to its bleeding international division.
Emirates, meanwhile, is looking to increase its business in Australia to counter moves by Etihad and Qatar.
Etihad doubled its stake in Qantas rival Virgin Australia to 10pc last month and Qatar Airways launched its first service to Perth this month, saying that it also wanted to partner with Australian carriers.
Qantas also faces increasing competition on domestic routes from Virgin, which is benefiting from alliances with Etihad, Singapore Airlines (SES: C6L.SI - news) , Air New Zealand and Delta (BSE: DELTACORP.BO - news) .