The deal gives SAB Miller a leading position in the Australian beer industry including the VB and Carlton brands.
SAB Miller chief executive Graham Mackay said: "We are pleased that we have reached agreement on a recommended transaction to be put to Foster's shareholders.
"Foster's will become an important part of our business, and through the application of our commercial capabilities and global scale, we expect to build on the initiatives that Foster's management has put in place, further enhancing Foster's performance and creating value for our shareholders.
“We look forward to working with Foster's employees and other stakeholders to ensure the success of Foster's in the future as the largest brewer in Australia with an outstanding portfolio of brands."
The Foster’s-owned brands join a SAB Miller stable that includes Dutch lager Grolsch, Pilsner Urquell of the Czech Republic and Italy’s Peroni.