The as-yet-unnamed research unit will get about $10 million in seed money to try to turn technologies developed in IBM's labs into products with environmental benefits.
Among the ideas the unit expects to explore is a networked system for efficiently managing a municipal water supply, methods of using nanotechnology to improve water desalination and filtration, and improved solar power cells.
Paul Horn, who directs IBM's nearly $6 billion a year research and development organization, said: "We kind of think that given how big the opportunity is here, it's almost a slam dunk for us."
Some such candidates already have gained some traction in IBM's labs, which has encouraged company executives to formalise the endeavour. IBM would likely partner with other companies to bring some products to market.
The green idea was one of 10 that emerged from IBM's recent "Innovation Jam," a massive online suggestion box in which employees were asked for ways the company could grow.
IBM chief Sam Palmisano has agreed to support all 10 with a total of $100 million, though the exact amount each will get has yet to be decided.
Horn said leadership and other structural details for the environmental group will be sorted out by the end of the year, with a launch in 2007.