The two agencies, which have worked together since Kitcatt Nohr's launch six years ago, will continue to share clients but said they would work more "autonomously" in the future.
Kitcatt Nohr, which acquired 5% of Underwired in 2006, has agreed to sell back its stake to the agency, which now owns 100% of its shares.
As a result of the changes, Kitcatt Nohr has created an in-house digital offering headed by digital strategist Lazar Dzamic, and is set to announce a host of senior creative appointments shortly.
Meanwhile, Underwired has hired Pete Anderson as planning director and Tony Bond as financial director, to support the company's continuing growth.
Underwired said it would still specialise in eCRM, email marketing and online campaigns, and will continue to provide digital design work for shared Kitcatt Nohr clients.
Marc Nohr, managing partner at Kitcatt Nohr, said: "Kitcatt Nohr and Underwired emerged at around the same time and we've grown together and supported each other enormously. But we feel now is the time to develop a digital offering at the heart of our business, rather than running digital across the two agencies.
"We're nevertheless looking forward to continuing our award-winning collaboration with Underwired and working together closely on shared business."