Motorola's mobile unit includes handsets and set-top boxes that will continue to do business under the name Motorola Mobility, while the remaining Motorola changes its name to Motorola Solutions. It will sell police radios and barcode scanners to government and business customers.

The US-based firm had announced in November last year that its board of directors has approved the separation of Motorola Mobility Holdings Inc from Motorola Inc.

Brown will continue as CEO of Motorola Solutions, while Jha will become CEO of Motorola Mobility.

In a joint statement, Greg Brown, Motorola co-CEO and CEO of Motorola Solutions, and Sanjay Jha, Motorola co-CEO and CEO of Motorola Mobility had said this "announcement marks another important milestone toward the upcoming separation that is expected to benefit Motorola, its stockholders, as well as each company's respective customers and employees.

"We look forward to taking advantage of the opportunities before us as we begin the new year as two independent, publicly traded companies," they added.

Motorola's professional business is doing well while its cell phone division is struggling to compete with the iPhone and other smartphones. The split would help investors to understand the two entities.

On January 4, 2011, Motorola, Inc will change its name to Motorola Solutions Inc and will begin trading on the New York Stock Exchange under the ticker symbol MSI, and Motorola Mobility Holdings Inc will begin trading on the NYSE under the ticker symbol MMI.

Under the deal, Motorola stockholders would receive one share of Motorola Mobility stock for every eight shares of Motorola common stock they hold as of December 21, 2010.

Immediately following the distribution, Motorola will effect a one-for-seven stock split on Motorola common stock-that is every seven shares of Motorola common stock will become one share of Motorola Solutions.

Motorola is understood to have originally announced its plans to separate its mobile unit into a separate company back in 2008.