In a widely expected move, the board of directors of the McGraw-Hill Companies this morning backed a plan to spin-off the company’s educational publishing group, McGraw-Hill Education, into its own company. The decision came after pressure from shareholders to increase the company’s stock price. With current MHC chairman Terry McGraw planning to head McGraw-Hill Markets, the split will end the decades-long involvement of the McGraw family with book publishing.

Robert Bahash, currently president of the education segment, will continue to lead the group, although MHC said a search is underway to recruit a new CEO. As a standalone company with projected 2011 revenues of $2.4 billion, McGraw-Hill Education will be the second largest education group in the world, trailing only Pearson. MHC said it hopes to complete the transaction by the end of 2012.

MHE has operations in the K-12, higher education and professional markets, with the latter also including some nonfiction trade businesses.

In a prepared statement, MHC said that has an independent company, MHE “will be able to optimize its solid cash generation capabilities and strong balance sheet to pursue accelerated growth strategies and augment its organic growth with digital services and/or via acquisitions or strategic partnerships. For example, it will have greater flexibility to develop and deploy new products and services to address secular trends toward digital education platforms and to pursue higher-margin opportunities in educational services such as online instructional and school digital services. Internationally, the company will be better positioned to capitalize on education spending and adult skills training in China, India, Brazil and other emerging markets, which are projected to continue to grow at double-digit rates.”

As it prepares to split into separate companies, MHC also said it is focused on reducing corporate-wide costs while simultaneously disaggregating shared services to establish two appropriately-sized corporate centers for the new companies