The split will leave the data storage products maker with its traditional hard-disk drive business and create two publicly traded firms.
The move is a response to a supply glut and gives into demands from activist investor Elliott.
Western Digital's flash memory unit was built through its $19 billion purchase of SanDisk in 2016 and caters to the smartphone and computer industries. Demand for flash chips has slumped after the pandemic, leaving an oversupply in the market and increasing the pressure on chipmakers to consolidate.
Since 2021, Western Digital and its manufacturing partner Kioxia have been in talks for a merger that would create a company that controls a third of the global NAND flash market.