Amazon.com has picked America's financial and political capitals for its split new headquarters, saying it will build offices for more than 25,000 people each in New York City and close by Washington DC.

The world's largest online retailer plans to spend $US5 billion on the two new developments and expects to get more than $US2 billion in tax credits and incentives, with plans to apply for more.

Its move ends a frenzied year-long bidding war among cities across North America, splitting the location between two finalists.

In addition, Nashville, Tennessee, will become Amazon's fourth-biggest office outside Seattle with more than 5,000 corporate jobs focused on technology and management for its retail operations unit.

With more than 610,000 workers worldwide, Seattle-based Amazon is already one of the biggest employers in the US and the world's third-most valuable company, behind Apple and Microsoft.

Still, it faces fierce competition for talent with Alphabet Inc's Google and other companies offering free perks in sunny - but increasingly unaffordable - Silicon Valley. It hopes the new headquarters will give it a leg up when it starts hiring for the offices in 2019.

"These two locations will allow us to attract world-class talent," Jeff Bezos, the company's chief executive and world's richest man, said in a news release on Tuesday.

Already marketing its forthcoming New York location in Long Island City, just across the East River from midtown Manhattan, Amazon said the neighbourhood is home to breweries, waterfront parks and easy transit access. The former industrial area also has a clock counting down the hours until the end of US President Donald Trump's first presidential term.

In addition, the choice of Arlington, Virginia, could hand Amazon greater political influence in the nearby US capital, where it already has one of the largest lobbying shops in town.

Bezos privately owns the Washington Post, which has written critical articles about Trump and in turn, he has been a frequent target of broadsides from the president. The paper maintains full editorial independence from its owner.

At the outset of the headquarters search last year, Amazon said it was looking for a business-friendly environment, in addition to help recruiting workers.

Amazon had received 238 proposals vying to host its next home base after Seattle. New York and Virginia beat out 18 other finalists from a January short list, including Los Angeles and Chicago.

In evaluating its options, Amazon drilled down into the quality of schools to which employees could send their children, a key factor in keeping workers satisfied. The company evaluated local SAT scores for college admission and met with superintendents, hearing how they characterised the importance of education in science and maths.