The 401(k) money received from a QDRO is not subject to the 10% early withdrawal penalty. The recipient can take the money as cash (and pay income taxes on it), roll it over to an IRA or their own 401(k) plan, or keep their share in the existing 401(k).
If you are going through divorce proceedings and your 401(k) plan becomes subject to a QDRO, you will need to give your employer the court order. Your plan administrator will then carry out the order according to the procedures set by your plan; check your summary plan description for details. If you are starting the divorce process, discuss the issue with your attorney, and ask your plan administrator if there is a standard QDRO form for your plan so you can be prepared.
For more information, see the Dept. of Labor’s publication QDROs – The Division of Pensions Through Qualified Domestic Relations Orders.