Jeffrey Bewkes, chief executive of Time Warner, will tomorrow announce the spin-off of the company's cable television unit in a deal that is expected to see around $4 billion (£2 billion) worth of cash released back to shareholders, The Times has learnt.

It is understood that Mr Bewkes has agreed the move after three months of detailed talks with Time Warner Cable's management.

The decision marks the first important structural change at Time Warner since Mr Bewkes took over from his longstanding predecessor Dick Parsons in January. It is believed that Mr Bewkes is keen to transform the company into a pure media content business.

The decision marks the most important step in Time Warner's past since it fought off demands by Carl Icahn, the billionaire activist investor, to sell off AOL, its internet division.

It is expected that Mr Bewkes will seek to split off the company's 84 per cent stake in Time Warner Cable, increase the business's debt levels, and release around $3.8 billion of cash — possibly in the form of a special dividend — that would be used to buy back stock.

Time Warner is the parent company for businesses such as AOL, HBO — the television company best known for Sex in the City and The Sopranos, Warner Brothers — the film studio, and Time Warner Cable — the business that pipes broadband, fixed-line phone services and cable television into American homes.

Shareholders have been grumbling for some time about the performance of the Time Warner share price which has fallen by a third over the last year. It is expected that existing shareholders would receive a holding in the demerged business.

Time Warner is already scheduled to address Wall Street tomorrow to unveil the media giant's first quarter results.

Henry Berghoef, research director at Harris Associates — the Chicago fund manager that holds 63 million Time Warner shares within its $60 billion portfolio — told The Times: "It would make sense to split the two companies. They have already been considering this at their own free will. They have different economic characteristics - one is a content business and the other is delivery. "

In a letter to shareholders in the group's annual report published in February, Mr Bewkes had already pledged to consider the options facing the cable television business.

He said: "We started a formal process to review our ownership of Time Warner Cable. We have long believed that cable is a great business. But, as the industry evolves, Time Warner Cable has increasingly different capital and financial needs than our other businesses.

"Currently, Time Warner owns about 84 per cent of the cable company’s common stock while public stockholders hold the remaining 16 per cent. The formal review process, which involves the boards of both Time Warner and Time Warner Cable, will determine what changes, if any, we should make to our ownership of the cable company."

Time Warner shares were today almost unchanged in New York trading a $15.15, having fallen from around $23 at the beginning of last year.

A spokesman for Time Warner declined to comment.

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