"This agreement is a brilliant next step in our longstanding partnership, enabling Google to supercharge their hardware business while ensuring continued innovation within our HTC smartphone and Vive virtual reality businesses," HTC co-founder and CEO Cher Wang said in a statement.

The rumor mill went into overdrive yesterday after HTC announced that trading of its shares on the Taiwan Stock Exchange would be halted today pending a "major announcement." The company swiftly added that, to debunk sale rumors, that it did not "comment on market rumor or speculation."

By then, however, most of everyone had assumed that the long-standing flirtation between the two companies would finally finish. Unsubstantiated reports on Twitter claimed that the deal would see HTC's manufacturing division become a part of the search engine, but the reality is that half of its R&D division will be joining Google instead. According to Google SVP of Hardware Rick Osterloh, the two parties have yet to set a new work location for these employees, but they will aim to bring minimal disruption to them. The remaining R&D team will focus on HTC's own smartphone brand as well as VR technology.

In return, Google "will continue to have access to HTC's IP to support the Pixel smartphone family," according to HTC's statement. Or in Osterloh's own words, it's "continuing our big bet on hardware," which is fitting given his involvement with Google's short-lived ownership of Motorola's smartphone business.

Much like the deal that cleaved Nokia's hardware business from its parent company, the HTC name and brand will live on but in both the smartphone and VR worlds.

Daniel Cooper contributed to this article.