The deal will secure JP Morgan $8 billion in business loans, as well as 338 branches in and around New York, serving 600,000 households and 100,000 businesses.
In return, the Bank of New York is to take over operations at JP Morgan's corporate trust unit, serving companies and investors in over 40 countries around the world, plus a further $150 million in cash.
Commenting on the deal, Bank of New York President Gerald Hassell said that the transaction was good news for investors:
"We are replacing a slower-growing business that does not fit with our core franchise, [with a] higher-growing business that does fit our strategic franchise, so I think our investor base will appreciate this," he said.
The swap will ensure that JP Morgan has a larger number of branches than any other bank in the New York area, with a total of more than 750 branches and 2,000 ATMs.
Meanwhile, the Bank of New York will more than double its trust business following the deal, servicing a total of $8 trillion in debts.