The quarterly dividend will increase to 35 cents per share from 25 cents.
The $5 billion stock repurchase program, which has no expiration date, replaces a $4 billion buyback program. About $2.5 billion of "repurchase authority" had been remaining on the previous buyback program.
Shares rose $1.62 or 2.4 percent on the news to $68.25 per share in premarket trading.
The news comes as San Diego-based Qualcomm is benefiting from strong demand for smartphones and a move by network operators around the world to a high-speed wireless technology known as long term evolution (LTE), where Qualcomm is ahead of rivals.
On January 30, Qualcomm raised its financial targets for this year and also announced the retirement of its chief financial officer.
(Reporting By Liana B. Baker; Editing by Gerald E. McCormick)