Dell has reached a deal to become a private company in a move worth $24.4bn with Microsoft putting forward a $2bn loan as part of the deal.
The move had been on the cards for some time and was confirmed on Tuesday with Dell shareholders set to receive $13.65 per share in the buyout, which has been led by founder Michael Dell and equity firm Silver Lake Partners.
Dell will remain as the chief executive of the firm and said the move would open up an "exciting new chapter" for the company and help the firm refocus its strategy.
"We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise," he said.
Microsoft confirmed it had made the investment as it sees Dell as a major played in the market that it wants to support, particularly as it supports its Windows 8 operating system.
"Microsoft has provided a $2bn loan to the group that has proposed to take Dell private. Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future," the firm said.
"We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform."
Egon Durban, a Silver Lake managing partner, said the deal would help kickstart Dell's position in the market by helping it focus its efforts on key business areas.
"Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company's transformation strategy to become an integrated and diversified global IT solutions provider."
Dell has suffered in recent years as its PC business has declined in the face of stiff competition from tablets from the likes of Apple.
The deal is subject to a shareholder vote and is expected to close in the second quarter of Dell's financial year for 2014.
Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal.