The company is set to release three separate apps for music, podcasts and films and shows.
The US technology giant was widely expected to reveal a replacement for the 18-year-old service at its worldwide developers conference (WWDC) on Monday, and its senior vice-president of software engineering took to the stage at the event in California to detail the plans.
Craig Federighi told the audience: "The future of iTunes is not one app, but three."
The restructuring, which will include apps named Music, TV and Podcasts, will be rolled out by Apple as part of the next version of its Mac operating system dubbed Catalina, which will be released later this year.
Each represents a new focus on streaming content through subscriptions and rentals rather than buying individual tracks and films to own, but users will not have to worry about losing content they have previously purchased.
But the move will see Apple bid to further persuade its product owners to sign up to its Spotify-style Apple Music service, as well as its recently announced Netflix rival Apple TV+.
Also due to arrive alongside Catalina are updates for the iPhone, iPad and Apple Watch.
The new version of iOS, which powers iPhone and iPad, will introduce a dark mode and an abundance of new features for stock apps like Mail and Maps.
Apple will soon introduce a new advanced take on iOS exclusively for iPads, too. Dubbed iPadOS, it will further bridge the gap between the tablet and traditional laptops by making things like multitasking far easier.
It will also get a new Files app for more Mac-like folder management, the Safari browser will get an upgrade so that it can display fully-fledged desktop versions of websites, and support for USB memory sticks.
Meanwhile, the Apple Watch will allow female users to track their menstrual cycle from the device for the first time, and will also receive its own dedicated App Store.
For the most enthusiastic Apple fans, the firm used the event to reveal a new Mac Pro - its high-powered, professional desktop computer. It will start at $6,000 and was shown off alongside a new connected screen.
Other new hardware announcements will not arrive until September, when Apple usually pulls back the curtain on the latest models of its iPhone, with WWDC traditionally focused on software.
Apple dedicated much of the event to security and privacy upgrades, including a "sign in with Apple" tool similar to those offered by Facebook and Google.
Users will be able to sign in to websites and services using their Apple ID, rather than using a social media account and sharing personal information.
Notably, the feature will offer users the option to hide their email address and instead be given a unique, random address that forwards messages to you rather than giving up your personal address.