Macy's.com will function as a separate, free-standing subsidiary, the company said. The site will be based in San Francisco and is expected to launch in October.
Federated said it is making the move to take advantage of the Internet's continued emergence as a vehicle for serving consumer shopping needs.
Macy's.com is headed by Kent Anderson, a Macy's executive who had been in charge of the company's Macy's West division.
The site originally was launched in 1996 as an informational site and began experimenting with online selling later that year, the company said.
The online store will sell more than 250,000 items. Customers will be allowed to return and exchange items ordered online at Macy's existing retail outlets.
"The Internet--much like our global mail-order catalog business--represents a strategically important complement to our department stores in an era when convenience is becoming a more important component of the value equation for customers," James M. Zimmerman, Federated chairman and chief executive officer, said in a statement.
"While the sales volume for department store-type goods on the Internet is relatively small today, we believe it is a phenomenon that will continue to grow. Federated's investment in this new venture will well-position us to capitalize on the growth of e-commerce in the years ahead," Zimmerman said.