The board of Imperial Chemical Industries (ICI) has agreed to the cash takeover, which requires approval from shareholders, after rejecting two previous approaches by Akzo earlier in the summer.
"We will create a leading global coatings and specialty chemicals company with a diversified geographic presence and well developed access to fast-growing markets in Asia-Pacific, particularly China and Latin America," said Akzo Nobel CEO Hans Wijers during a press conference.
Wijers also indicated that "there may likely be job cuts" during the integration of the two groups.
In a joint statement, Akzo Nobel said the board of ICI had accepted a cash offer of 670 pence for each ICI share.
Additionally, Akzo said Henkel, a German maker of household chemicals and cosmetics, had agreed buy the adhesives and electronic materials businesses of National Starch and Chemical Co, which is owned by ICI, for £2.7 billion
"Akzo Nobel has today made a compelling offer which delivers full value for ICI reflecting ICI's strong future growth prospects and strategic opportunities," said ICI chief executive John McAdam.
"Accordingly, the ICI board will be recommending shareholders accept the 670 pence cash offer from Akzo Nobel as it believes it to be in their best interests."
The recommended offer is the culmination of two months of negotiations which saw ICI rebuff two informal offers from Akzo at 600 pence and 650 pence, before finally opening its books to the company following the 670 pence offer.