IBM Corp has agreed to hive off its loss-making semiconductor unit to contract-chipmaker Globalfoundries Inc, the Wall Street Journal reported, citing people familiar with the matter.

IBM will pay Globalfoundries $1.5 billion to take the chip operations off its hands, WSJ said. (on.wsj.com/1ur3OX4)

IBM issued an advisory on Sunday saying it would make a "major business announcement" on Monday.

Talks between IBM and Globalfoundries has been going on for a while.

IBM is also scheduled to report its third-quarter earnings on Monday.

Representatives at IBM and Globalfoundries were not immediately available for comment outside regular U.S. business hours.