The Actors Studio has trained a host of famous actors and actresses since its founding in the 1940s.
With the split, New School University will have no affiliation with the Bravo TV program "Inside the Actors Studio," President Bob Kerry told the New York Times.
James Lipton, the oft-parodied Bravo host, founded the university's Actors Studio Drama School nearly 11 years ago and stepped down as dean last June.
Lipton could not be reached for comment about the breakup, which was preceded by heated meetings.
Broadway veterans Robert LuPone and Arthur Penn will head the university's new graduate acting program.
Several "major" New York institutions were courting the Actors Studio, said actress and co-President Ellen Burstyn.
"It's a divorce, and a divorce always has a certain sadness to it," Burstyn said, but the Actors Studio "will go on, and it will have a new home."