The energy services firm said the JV, in which it will hold a 51% stake and Siemens 49%, will boost its activities in the gas turbine sector.
Aberdeen-based Wood, which said its power maintenance arm performs better when it operates alongside an original equipment manufacturer, expects annual synergies of around $15 million to flow into the group by year three.
It will also receive a net payment of $34m reflecting the value brought by Wood Group's 49% share in Wood Group Pratt & Whitney, the turbine services firm, which will be rolled into the JV.
Mark Dobler, the divisional chief executive of Wood Group GTS, will head up the JV. He will leave the Wood Group board to take up the role. Mr Dobler noted the JV, due to be come into being in the first quarter of 2014, will have revenues of around $1 billion and a worldwide workforce of around 4500.
Wood Group chief executive Bob Keiller said: "Today's announcement is an important step in the ongoing development of the group's strategy. The JV with Siemens will bring together two complementary businesses and create a differentiated service offering for a global customer base."
Analysts welcomed the move, with Liberum Capital saying it will help Wood to focus on core engineering services. Oriel Securities said it was a "sensible move for a division that at times struggles to compete against the original equipment manufacturers".