The unit, which is based in the Cabinet Office, was set up in May 2010 to apply insights from behavioural economics and psychology to public policy.
The Cabinet Office have said that the unit, formally called the Behavioural Insights Team, would be spun out of Whitehall. This will be the first time that a policy unit has ever been moved out of government.
Both staff members and a private firm will take a stake in the new company, which will be run as a mutual joint venture. A competition is now under way to identify an external investor.
