The Japanese company, which is involved in a range of businesses from power generation, transmission systems and medical equipment to computer chips and laptops, pointed to slowing TV sales for the decision to stop development and sales of televisions in North America.
Compal would sell televisions under the Toshiba brand, it said, adding that it was also in talks to license its brand to manufacturers in other TV markets outside Japan.
"As the growth of global (TV) market is slowing down, and continues to see harsh price competition, Toshiba has decided to build a new business structure," it said in a statement.
The firm has said it would focus on super high-definition 4K TVs in Japan and the rapidly growing emerging markets.
The announcement came as Toshiba said net profit for the nine months to December rose 85.9 percent to 71.9 billion JPY ($611 million, roughly Rs. 3,786 crores), thanks to strong sales in the energy and infrastructure business, which includes nuclear power plants, as well as electronic devices, including memory chips.
Japanese companies with big sales outside of Japan have also benefited from a sharp drop in the value of the JPY, which inflates the value of repatriated income earned overseas.
Operating profit rose 6.2 percent to 164.8 billion JPY, while sales rose 4.1 percent to 4.7 trillion JPY, Toshiba added.
For the fiscal year to March, Toshiba kept its forecast unchanged, expecting a net profit of 120 billion JPY on sales of 6.7 trillion JPY.