Union Street will focus on projects for mainstream consumer and challenger brands, using expertise in sponsorship, experiential, partnership marketing, social and traditional PR.
Octopus follows Blue Rubicon and Burson-Marsteller in launching its own consumer brand. Rival tech agency Hotwire recently announced that it was going to scrap its consumer shop Skywrite, in a move to consolidate its consumer abilities.
Union Street will be based at Octopus Group's London office, and will be staffed by the former Octopus consumer team, led by Juliet Cameron.
The brand will report to Octopus MD Jon Lonsdale when it opens its doors on 23 July.
Cameron said: 'Union Street is all about creating a new exciting place where discipline doesn't matter and engagement campaigns are built from the ground up based on what the "man on the street" really thinks and cares about.'
Existing Octopus consumer clients, including BMW and HotUKDeals, will move across to the new brand.
Union Street has also been appointed by That's Not Fair, a new fashion label for kids, following a competitive pitch.
Start-up Flavrbox, an online community championing independent food and drink producers, will work with Union Street on its summer launch programme.
Lonsdale added: 'With Union Street, we are taking this to the next level by creating something fresh, challenging and current. Perhaps we are changing the way the market thinks about us at the same time.'