The board of Expedia, the world’s largest online travel company, has approved a plan to spin off its TripAdvisor brand.

Expedia said it intended to split into two publicly traded companies by the third quarter of 2011.

TripAdvisor will operate as a separate entity, while Expedia will continue to include brands Hotels.com and Hotwire.

The spin-off is subject to conditions.

The board said it expected the transaction to take “the form of a distribution of stock of TripAdvisor to Expedia shareholders or a reclassification of stock, with the holders of Expedia stock to receive a proportionate amount of TripAdvisor stock”.

Shares in Expedia rose 15% to $25.89 in after-hours trading in New York.

TripAdvisor offers travel advice and reviews posted by other travellers and attracts more than 40 million visitors a month across 29 countries.