The company will be based in the Miami area and plans to design and construct two new cruise ships, but has yet to reveal a launch date.
Sir Richard, Virgin Group founder, said: "We plan to shake up the cruise industry and deliver a holiday that customers will absolutely love. They’ll be sailing on the latest ships offering a great quality, a real sense of fun and many exciting activities all delivered with the famed Virgin service."
Tom McAlpin, previously president and CEO of The World, Residences at Sea, is the new company’s CEO. He was also formerly president of Disney Cruise Line, having joined as part of the founding management team.
He said: "Cruise guests deserve something better and different to what is being offered today, and Virgin Cruises is committed to creating breathtaking experiences for them and a new generation of guests. Opportunities like this do not come often, so I am very excited to lead this business and introduce the Virgin brand to the cruise industry, as it has always put customers at the heart of what it does."
Virgin has teamed up with, Bain Capital, one of the world’s leading private investment firms on the venture.