The new company is looking for a U.S. network deployment between 120 million and 140 million people by the end of 2010.
Sprint and Clearwire, a startup founded by cellular pioneer Craig McCaw, had already announced their plans to build out networks using WiMAX technology, but had been looking for outside funding.
The new company will be led by Clearwire Chief Executive Benjamin Wolff, with Sprint Chief Technology Officer Barry West serving as president. West also leads Sprint's XOHM division.
The Kirkland, Wash.-based venture will house workers from Clearwire and Sprint's XOHM unit and will have research and development and other operations located in Herndon, Va.
Its board will consist of 13 members at the start. Sprint will name seven of them, which will include at least one independent director. The investor group will name four members, including one independent.
Eagle River, a private investment company controlled by wireless veteran Craig McCaw, will name one member, with the remaining independent member selected by Clearwire's nominating committee. McCaw is expected to serve as non-executive chairman.
Other anticipated board members include Sprint President and CEO Dan Hesse, Comcast Chairman and CEO Brian Roberts, Time Warner Cable President and CEO Glen Britt and Stanton.
The deal, which has been approved by the boards of all companies involved, is expected to close during the fourth quarter.
The company will apply for a Nasdaq listing under the ticker "CLWR." Clearwire shares jumped 7.4 percent, or $1.22, to $17.68 at the open of trade.
Sprint shares rose 4.5 percent, or 41 cents, to $9.60.