Time Warner's board has approved the split from AOL

US media giant Time Warner says its board has approved 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 firm to its own shareholders.

AOL and Time Warner combined in 2001 in what has become 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.

In March, former Google advertising executive Tim Armstrong was recruited to head AOL with the possibility of leading a separation.

Google is among the companies that has grown to dominate online advertising at the expense of the once powerful AOL.

"We believe AOL will have a better opportunity to achieve its full potential as a leading independent internet company," said Time Warner chief executive Jeff Bewkes.

AOL bought Time Warner in a $147bn (£92bn) deal that has come to symbolise the excesses of the dotcom boom.

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.