The WhatsApp app will continue as a standalone service with its own brand and headquarters in Mountain View, California. The service’s founder Jan Koum will join the Facebook board of directors.
The deal comprises an initial $16 billion (£9.6 billion), including $4 billion (£2.4 billion) in cash and approximately $12 billion (£7.2 billion)-worth of Facebook shares, with an additional $3 billion (£1.8 billion) in stock for the WhatsApp founders that will vest four years after the deal closes.
The deal dwarfs the $1 billion Facebook was reported to have paid for Instagram, the picture-sharing service, in 2012. WhatsApp will be able to set its own direction as part of Facebook, in a similar manner to Instagram.
WhatsApp has more than 450 million people using it every month, with 70 per cent of those users active on any given day. The service claims its messaging volume is approaching the global SMS messaging volume.
Mark Zuckerberg, the founder and chief executive of Facebook, said: "WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable. I've known Jan for a long time and I'm excited to partner with him and his team to make the world more open and connected."
Facebook said in a stock market announcement that the deal supported the services' shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably. Facebook said the combination would help speed up growth and user engagement across both companies.
Koum, the co-founder and chief executive of WhatsApp, said: "WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide.
"We're excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world."
The investment bank Allen & Company LLC and Weil, and the law firm Gotshal & Manges, advised Facebook, and Morgan Stanley and Fenwick & West advised WhatsApp on the deal.
The agreement is dependent on regulatory approval.