Fairfax Media shareholders will receive one share in a newly listed Domain for every 10 Fairfax shares they own, if a vote to separate the real estate business from the news publisher is successful.
Fairfax shareholders will vote on the planned spinoff of Domain ahead of the media company's annual general meeting on November 2, documents outlining the separation plan show.
Domain is the expected to be listed on the ASX by the 16 November and will issue approximately 575 million shares, with Fairfax retaining 60 per cent of the stock and a free float of the remaining 40 per cent.
The company has confirmed Fairfax Media chairman Nick Falloon will also chair Domain, while Antony Catalano will continue as chief executive officer.
Mr Catalano will receive a base salary of $1.2 million and short-term incentives worth $960,000.
He will also be eligible for a one-off allocation of long-term incentive options worth $5 million.
An independent expert report from corporate advisors Grant Samuel that accompanied the report has found the Domain spinoff is in the best interests of Fairfax shareholders.
The report says Fairfax management "believes it is now time to allow the Domain business to start the process of 'leaving home'."
Grant Samuel notes there is a "marked difference" in the outlook for Domain and the traditional Fairfax publishing business.
"Having business units on two very different growth trajectories creates a degree of misalignment within Fairfax in relation to equity based incentives for staff; other remuneration and employment practices; and cultural differences (technology vs publishing)," the report says.
Following the split Fairfax will have net assets of $970 million, the scheme documents show, while Domain will have assets of $1.35 billion.
In the Domain scheme booklet provided to the ASX on Friday, Fairfax said there will be commercial arrangements between the companies including favourable marketing and promotions agreements, under which Fairfax will provide services at a discount to standard market rates in Domain's first two years as a public company.
The scheme implementation documents released to the ASX on Friday do not include a valuation of the newly separated Domain.
The Grant Samuel report gives Domain an estimated enterprise value of $1.59 billion to $2.26 billion, based on published broker estimates but does not estimate a market valuation of the company.
In a trading update on Thursday, Fairfax reported its overall group revenues are down four to five per cent on the financial year to date, while Domain enjoyed a 22 per cent lift in digital revenues and a 13 per cent lift overall.
In the near-term, Domain's corporate and operating costs will be $10 million higher - including board and event costs - and Fairfax also anticipates around $14 million of pre-tax one-off costs.
If shareholders follow the board's unanimous recommendation, Domain will report its first half year results in February 2018, with first full year results in August 2018.
Fairfax Media shares closed unchanged at 95 cents on Friday.