The new arm will compete to employ English language authors from the firm's base in Luxembourg and focus on English-language books.
Online retailer Amazon is planning to establish a new European publishing division in early 2013 to start publishing printed books in the market where the firm is likely to encourage high-profile authors.
To be led by Vicky Griffith, the new arm will compete to employ English language authors from the firm's base in Luxembourg and focus on English-language books.
Amazon Publishing vice president Jeff Belle said: "As our CEO likes to say, 'It's still day one'.
"That is especially true of Amazon Publishing," Belle said.
"We have much work to do, and many challenges ahead of us."
The move is ring warning bells for the traditional publishing firms that are already upset by the rise of e-books and by some authors putting out their own work through internet.
Recently, the firm has released cookbook, 'The Four Hour Chef', and reported sales of about 60,000 copies in print and for Kindle, and 13 of the top 100 Kindle bestsellers were published by Amazon in October.
In November, the online retailer had issued of debt in its first bond offering in ten years in a bid to raise money to expand its operations and cash in on the low interest rate.
The raised amount will be used to finance the purchase of its Seattle headquarters for $1.16bn and will also use the money for general corporate purposes.