The move could give Spaniard Fernando Alonso, the double Formula One world champion who remains under contract to McLaren, another chance to win the Indianapolis 500 even if the Spaniard is not interested in a full season.
The existing team will be renamed Arrow McLaren Racing SP, competing with two Chevrolet-powered cars and a possible third entry for Indianapolis.
Former Indy 500 winner Gil de Ferran, the sporting director of McLaren Racing, will lead a dedicated group independent of the Formula One team.
McLaren last competed full-time in the IndyCar championship in 1979.
"We come to IndyCar in full respect of the sport, our competitors, the fans and the task ahead," said McLaren Racing CEO Zak Brown.
"It's definitely a very integrated partnership, technically, managerially and commercially," he told a conference call.
He said McLaren, which faces a likely record 22 race season in Formula One in 2020 and are also contemplating a world endurance involvement from 2021 when the rules change to hypercars, were not biting off more than they could chew.
McLaren has been mulling a full IndyCar campaign for some time, its decision influenced by failure to qualify Alonso for this year's Indianapolis 500 as a one-off entry.
Brown said Alonso, who left Formula One at the end of last year, still wanted to win Indianapolis and McLaren wanted to do so with him.
"He has not shown to date interest in competing in a full season," he added.
"(For) Fernando, or someone else potentially, we would consider a third car entry at Indy only."
Canadian James Hinchcliffe is committed through 2020 with Schmidt Peterson while Swedish former F1 driver Marcus Ericsson will be out of contract at the end of the year.
Alonso wants to become only the second driver after the late Briton Graham Hill to win the "Triple Crown of Motorsport" and has already won the Monaco Grand Prix and Le Mans 24 Hours. Indianapolis is the only remaining race to win.
This year's Indy 500 winner Simon Pagenaud told Reuters last weekend that Alonso's best chances of success at The Brickyard would be either by doing a full season or racing with an experienced team.
McLaren made a catalogue of errors at Indianapolis this year, from having to scrounge a steering wheel at short notice to missing vital track time because the spare car was the wrong shade of orange and was elsewhere being resprayed.
"We came away from that experience stronger than ever in our desire to compete in IndyCar," said Brown.
"But we knew we would have to go about it differently, which was either be fully committed or don't do it.
"The reasons why we want to be in IndyCar have always remained."
McLaren sold more sportscars in the United States than anywhere else last year, with the country also a major market for their sponsors. Formula One is also looking to expand its audience significantly in the Americas.