The bank will explore a full range of options, which could include a sale, spinoff, or strategic partnership.
While JPMorgan is looking to exit the physical commodities business, it said it remains committed to its traditional banking activities in the commodities markets.
The announcement comes after the Federal Reserve said last week that it is reviewing a 2003 decision that allowed regulated banks to trade in physical commodities markets and the U.S. Department of Justice and Commodity Futures Trading Commission began a probe into Wall Street's role in the metals warehousing industry.
JPMorgan has also faced additional pressure from a power market manipulation scandal in California and the Midwest, with reports suggesting the bank will soon pay a near record $410 million settlement with the U.S. Federal Energy Regulatory Commission (FERC).
(Read more: US weighs inquiry into big banks' storage of commodities )
It also comes days after the New York Times reported that warehousing activities of Goldman Sachs and other financial institutions were inflating prices of commodities like aluminum and ultimately costing consumers billions of dollars.
Since 2010 metals warehousing has become dominated by banks including Goldman Sachs and JPMorgan Chase and global commodities traders like Glencore and Trafigura.
JPMorgan's decision to review options for the business came after an internal review, the bank said in a statement.
The abrupt move marks a sharp reversal for the bank that had pushed aggressively into the sector since 2008, when it first acquired a host of physical trading assets and expertise through its acquisition of Bear Stearns during the financial crisis.
That was followed by the acquisition of RBS Sempra Commodities in 2010, allowing the bank to quickly challenge Goldman Sachs and Morgan Stanley for the title of largest commodity business on Wall Street.
-Reuters contributed to this report.