The unit, previously part of the Google X research lab, will become a standalone Alphabet company, Google cofounder Sergey Brin said in a Google+ post on Thursday.
Andy Conrad, who has run the division since 2013, will be its CEO. Conrad was previously chief scientific officer at molecular diagnostic testing company LabCorp. and also cofounded the National Genetics Institute.
He will oversee software engineers, oncologists and optics experts at the Alphabet company, where they'll continue to work with other life sciences companies to move new technologies from early stage R&D to clinical testing, Brin said.
The new company will aim to develop proactive, rather than reactive, approaches to health care. In addition to the contact lens, its work includes a gene analysis project to create a picture of a person's health on a molecular level, and a diagnostics system built around nanotechnology.
Google announced its sweeping reorganization last week, which separates its core services like search and ads from emerging projects like self-driving cars, under a new holding company named Alphabet.
When the changes were announced, Google said Alphabet's new companies would comprise "far afield" efforts like its Life Sciences unit as well as Calico, which is focused on health and aging. But at the time, Google stopped short of saying which companies will be spun out under Alphabet.
"This is the type of company we hope will thrive as part of Alphabet," Brin said on Thursday.
He didn't announce a new name for the Life Sciences division, so it's unclear yet what it will be called, and he didn't say when it will officially be formed. Alphabet will come into existence later this year.
While Google is now identifying new companies within Alphabet, it's also starting to slim down Google itself. Niantic Labs, an augmented reality division, will split from Google and Alphabet entirely.
Brin will become Alphabet's president. Larry Page, Google's cofounder and current CEO, will become CEO of Alphabet. Sundar Pichai, currently Google's head of product, will become Google's CEO.