Hydro has a minority share in Norwegian marine batteries firm Corvus Energy, a small stake in Sweden's Northvolt, which is building factories to make batteries for electric vehicles, as well as battery recycling joint venture Hydro Volt.
The renewable growth division would focus on developing renewable power projects, initially in the Nordics and Brazil.
Hydro already operates hydropower plants and one onshore wind farm in Norway and buys a lot of renewable energy from suppliers with power purchase agreements (PPAs).
"We aim to enter projects at an earlier stage so we can take part in developing, commercialize, construct, co-own and in some places operate them," Arvid Moss, executive vice president for energy and corporate development, said.
The company will also investigate options for integrating battery storage into its plants to alleviate the costs of having to use more expensive power at peak times.
Internal recruitment for the two divisions has already started and Hydro was also looking for external candidates with the necessary specialist knowledge, spokesman Halvor Molland said
The new divisions are part of the "Energy" business area and will help to align the company focus on sustainability and profitability, he said.
Presenting second-quarter earnings in July, CEO Hilde Merete Aasheim said Hydro would grow and diversify into the "megatrends" of recycling, renewable energy and batteries.