The group will continue to create, manufacture and sell audio/visual-related equipment, mainly flat-panel TVs and commercial-use LCD projectors.
The Tokyo-based company said the move is an attempt to thwart continuing losses due to the worldwide economic downturn and the rapid price erosion of flat-panel TVs and other products.
"Hitachi has been pushing ahead with efforts to convert to a low-risk operating structure and improve earnings by implementing business structure reforms," the company said in a statement.
"These reforms have included sourcing glass panel components used in plasma TVs from outside the Hitachi Group and right-sizing the workforce since the previous fiscal year."
Hitachi also said it expects that the spun-off company will bolster its B2B businesses, such as commercial-use LCD projectors.