Apple has confirmed that it is dropping IBM chips from its Mac computers in favour of those made by Intel.
Intel chips may be introduced to Apple's Mac Mini by 2006
The first Apple computers with the Intel chips onboard will be on the market by this time next year.
"We think Intel's technology will help us create the best personal computers for the next 10 years," Steve Jobs, the head of Apple, said.
The move is being seen as a big gamble for Apple strategy, and a boost to Intel at the expense of IBM.
It ends a decade-long relationship between Apple and IBM, which have recently wrangled over supply problems.
The agreement means Apple is joining the ranks of other computer makers which use microprocessors built on the x86 architecture.
The Mac Mini is expected to be the first Apple computer to use Intel chips, with the entire product line switching by the end of 2007.
Apple's move to Intel is thought to have come about because of IBM's reluctance to expand the number and range of PowerPC chips it makes.
IBM is producing chips for future consoles
Furthermore IBM has yet to produce a version of the G5 chip that would be suitable for use in Apple laptops.
IBM has the contract to make PowerPC chips for Microsoft's imminent Xbox 360 console, Sony's forthcoming PlayStation 3 and Nintendo's future game-playing machine.
As a result the cash it gets from making chips for Apple has become a very small slice of its revenue.
Because of the sheer volume of chips that Intel makes the move could mean that Apple computers become significantly cheaper.
The deal is a big win for Intel, which has in the past had a close alliance with Microsoft.
"We are thrilled to have the world's most innovative personal computer company as a customer," Intel chief executive Paul Otellini said.
"We look forward to providing advanced chip technologies, and to collaborating on new initiatives, to help Apple continue to deliver innovative products for years to come," he said.
But the move is not without its obstacles.
To begin with it will mean that the core software, the operating system, for Apple computers will have to be adapted.
This will be easier for the latest version of the operating system, known as OS X, as it is based on software that already runs on Intel chips.
There are reports that Apple has licensed technology from a company called Transitive which makes software that makes it easier to port programs on to different chip architectures.
There is also speculation that Apple could lose sales in the coming months as people wait for computers equipped with the more powerful Intel processors.