MANASSAS, Va. (AP) _ International Business Machines Corp. has announced plans to shut one of three divisions at its Manassas plant, eliminating 725 jobs by the end of August.

Affected employees will be offered a choice of relocating or taking a severance payment, Joe Militano, spokesman for the Armonk, N.Y.-based company, said Thursday.

In addition, about 20 subcontractors at the plant will not be rehired when their contracts end.

The affected employees are in the General Technologies division, which develops computer components.

IBM last week reported a $2.8 billion loss for 1991. It plans to trim more than 20,000 workers this year through voluntary incentive packages. Last year, 29,000 employees left the company through such programs.