The New York-based new company will be set up in April and will create and market loan-backed securities to investors.
Mizuho's move will see it become the first Japanese bank to compete in the US investment banking market.
The firm will have a market capitalisation of $33.1 billion and will be joint owned by Mizuho Securities and Mizuho Corporate Bank, who will own stakes of 23 per cent and 67 per cent respectively.
It is anticipated that once established the firm's remit will expand to take in hedge fund investment, and has reportedly set a target of managing assets of three trillion yen in three years.
Mizuho was recently asked by Japanese brokerage Nikko Cordial to sell its 4.8 per cent stake in the company to facilitate the proposed takeover by US banking giant Citigroup.
The Japanese bank had originally sought a takeover of the brokerage itself, but has backed down and is now proposing an investment banking joint venture with Citigroup.