Time Warner plans to spin off its AOL internet division as a separate company by the end of this year.
Time Warner will buy the 5% of AOL it does not already own from Google, then offer the company to its own shareholders.
The BBC reports AOL and Time Warner combined in 2001 in what became one of the least successful mergers in history.
Time Warner said last month it was planning to spin off some or all of AOL as internet advertising slumped.
AOL bought Time Warner for $US147 billion. At the time, much of AOL's revenue came from dial-up internet access, which peaked in 2002 and has been in decline ever since.