Blackstone is hoping the move, which will take effect July 1, will boost its share price, which has traded at a discount to traditional asset managers such as BlackRock Inc for more than a decade.
Under the so-called C-Corp structure, Blackstone will pay corporate taxes on all its revenue, in exchange for enabling investors such as mutual funds and index trackers to buy the stock.
The additional tax burden has become less severe after the headline U.S. corporate tax rate was lowered effective last year to 21 percent from 35 percent.
Two other private equity firms, KKR & Co Inc and Ares Management Corp, announced last year they would also make the switch.
Passive investors such as mutual funds, which are becoming more important as they manage more money, are restricted by their mandates from acquiring the stock of publicly listed partnerships.
Private equity firms pay corporate taxes under the partnership structure on the management fees charged to investors, but are mostly shielded from paying these taxes on performance fees.
Blackstone said the expanded investor base was worth what it called a "modest" tax hit.
"We believe the decision to convert will make it significantly easier for both domestic and international investors to own our stock and should drive greater value for all of our shareholders over time," Blackstone Chief Executive Stephen Schwarzman said in a statement.
Blackstone also announced first-quarter earnings on Thursday, reporting distributable earnings - the actual cash available for paying dividends - of $538 million (£414 million) in the first quarter, up from $502 million a year earlier.
This translated to distributable earnings per share of 41 cents, lower than the 51 cents analysts had predicted on average based on Refinitiv data.
Nevertheless, the announcement of the switch to a corporation sent Blackstone shares surging about 10 percent in premarket trading to $39.20.
"We believe this will unlock value, as the partnership structure made it too difficult for many of our long-only clients, and major indexes, to own," Credit Suisse analysts wrote in a research note.
Fee-related earnings, the amount Blackstone earns from management fees, were up 11 percent year-on-year at $374 million.
Blackstone said its assets under management reached $512 billion at the end of March, up 14 percent from a year ago.
Blackstone declared a first-quarter dividend of 37 cents per share.
(Reporting by Greg Roumeliotis in New York; Editing by Bernadette Baum)
By Greg Roumeliotis