IBM and Lenovo will also form a partnership that will include a global OEM and reseller agreement for various IBM products, including its entry and mid-range Storwize disk storage systems.
Around 7,500 IBM employees will be offered jobs at Lenovo.
"This divestiture allows IBM to focus on system and software innovations...such as cognitive computing, Big Data and cloud," says IBM's Steve Mills.
The deal comes after IBM's hardware division suffered another wretched quarter in Q4, with x86 sales dropping 16%.
The question is whether U.S. security concerns will cause a delay to the transaction or cause it to be blocked. (PR)