NDS supplies pay-television and digital television software and systems and is listed on the Nasdaq market but will cease trading as a public company once the deal is completed.
The deal is being funded by venture capitalist firm Permira, which will take a 51% share in NDS once it goes private. News Corp will own the remaining 49% share.
NDS said the old ownership structure imposed "certain limitations" on NDS taking up the opportunities that the convergence of broadband and broadcast technology was opening up.
Abe Peled, chairman and CEO of NDS, said: "NDS needs to have the strategic agility and flexibility to enter into any type of value enhancing transactions. ... News Corporation has decided to reduce its ownership position in NDS so that NDS can capitalise on these new opportunities with a more independent structure and the expertise of Permira."
The deal is subject to regulatory and shareholder approval.
NDS makes the VideoGuard, which is used by pay-TV companies to prevent people from accessing their content for free. It can be used on set-top boxes, PCs, mobile phones and portable media players.
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