Bloomberg reported that IBM will pay GlobalFoundries $1.5 billion to take on the business, and receive $200 million of assets in return.
The mooted shedding of IBM's chip business has been close to finalising before, only with the deal to collapse.
In July, a deal with the same pair of partners, after terms could not be agreed to.
Earlier this year, IBM parted with its x86 server business, which was, and had to find a buyer for its chip manufacturing.
If confirmed that the deal between IBM and GlobalFoundries will be the latest in a growing list of companies that have separated or divested business units recently.
Since the end of September, eBay has announced that it willinto a separate publicly traded company; HP has decided to into a PC and printer businesses and an enterprise business; and Symantec will into a security-focused company and an information management business.