The bank says the deal will provide it with a net gain of £1.5bn taking into consideration goodwill of £1bn from a business grown largely organically over the last five years.
It says it will also allow the group to participate in future value creation through a continuing commercial relationship with the iShares business.
Under the agreement Barclays has an option to receive 20 per cent of the value of iShares in cash following a future increase in value of the business.
Shares in Barclays, which were already performing well in early trades had gained 10 per cent to 173.60p by 2.40pm as news of the deal filtered through.
Barclays group chief executive John Varley says: “iShares has experienced rapid growth over the past several years and has reached a point where it can develop further on a standalone basis. Barclays shareholders will benefit from a reinforcement of our capital base and an ongoing commercial relationship with iShares.”