The New York Stock Exchange has struck a deal that will merge it with electronic market Archipelago Holdings.
The unexpected move - one of the boldest in the exchange's 212-year history - allows it to gain a competitive electronic trading platform and become a public company in one stroke.
It comes as the NYSE faces competition from more nimble electronic rivals and growing pressure from major investors for cheaper and more efficient trading.
The new holding company, which will be named the NYSE Group Inc., will involve the 1,366 NYSE seat holders receiving $400 million in cash and 70 per cent of the new company's shares.
Archipelago shareholders will get 30 per cent of the new company's shares.
"This transaction, transforming the NYSE into a public for profit entity, is an essential step to maintain our global competitiveness and leadership," said NYSE Chief Executive Officer John Thain at a press conference at the Big Board's headquarters in lower Manhattan.
The move also raises the stakes between the NYSE and its arch rival, the Nasdaq Stock Market, which is expected to acquire electronic trading platform Instinet Group as soon as this week.