“We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately,” the bookseller’s CEO, Michael Huseby, said in a statement.

Barnes & Noble first created the Nook Media division, which includes its college bookstore chain, in 2012 with a view to eventually spinning it off. Nook Media’s outside investors are Microsoft (MSFT), which owns 17.6% and British publisher Pearson, which owns 5%. Barnes & Noble owns the rest. The company gave no timetable for the split.

Barnes & Noble launched its first Nook device in 2009, trying to wrest e-book sales from Amazon.com (AMZN). For a while, the Nook was successful, allowing Barnes & Noble at one point to have as much as 27% of the e-books market, more than its share of physical books. But while Nook e-readers fared well, the tablet version flopped against Amazon’s Kindle and Apple’s (AAPL) iPad.

The company last year scaled back its Nook business after losing hundreds of millions of dollars over the years developing a product that ultimately flopped (selling about 10 million devices in all), saying it would only resume making new devices with a manufacturing partner. Barnes & Noble recently lined up Samsung to be that partner, and the companies will launch a new Nook this summer.

While sales of books at its brick-and-mortar stores have finally started to stabilize, Barnes & Noble gave a sales forecast that shows it’s not out of the woods: for the fiscal year that started last month, Barnes & Noble expects both retail comparable bookstore sales to decline in the low-single digits.  College comparable store sales are also expected to decline a bit. (Both business said net sales gains in the final quarter of fiscal 2014, which ended May 3.)

On the bright side, Barnes & Noble said its Nook segment’s losses would continue to shrink.