The move means that "key strategic partners" can invest in the laboratory, while ensuring that Xerox continues to control access to the centre's research and technology, the company said.
Xerox announced plans last year to create the wholly owned subsidiary, and said it would seek strategic and non-competitive partners for PARC. The company said active discussions are under way with potential investors.
The new company, which is expected to commence operations early in 2002, will continue to generate a stream of inventions while creating opportunities for Xerox and future investors to market PARC-developed technology commercially.
Xerox said it expected PARC employees to transfer to the new company early in the new year. A search for a chief executive for the company is underway.
Founded in 1970, PARC has developed technology such as the graphical user interface, client/server architecture, laser printing and Ethernet.