Blackwell Publishing will buy Murray Publishing for $1.2 billion.
The company will operate as a subsidiary of Murray Gold.
Murray Gold is a publishing group based in Perth and Melbourne that focuses on publishing Australian-produced books and short stories.
It publishes novels, short stories, music, and a collection of graphic novels.
Blackwell is an imprint of Penguin Random House.
The Australian Financial Report said Blackwell will be based in Adelaide and New South Wales.
Murray has about 1,400 employees in Australia, and it’s in the business of selling Australian-made books.
Murray Books has been in business for decades and has more than 400 books in print, and more than 40,000 digital books in digital download, with titles like The Last of the Pines and the forthcoming The Last Witch Hunter.
Blackfield Publishing is a smaller publisher, with a staff of about 800.
Its business is largely digital.
It also sells a range of other books, including books in audio formats, and graphic novels in print.
Murray is the largest independent publisher in Australia with about 5,500 titles.
The newspaper said the deal would be announced at the end of the year.
Murray will also publish Australian titles, including a collection called The Last Night in Australia by the author of the novel The Last House of the Blackwood family.
The Last Story in Australia will be published in September.
“We are delighted to announce a long-term partnership with Blackwell publishing,” Murray Books president Paul Riddell said.
“This partnership provides us with an opportunity to grow and continue publishing Australian books, alongside our Australian publishing partners.”
Mr Riddett said Murray would be the largest publisher in the region, and Blackwell the second.
“The last thing we want to do is to sell out, and we have a long history of doing that in Australia,” he said.
The books are being produced by Blackwell’s Melbourne-based publishing house, The Artisan, which also publishes other titles in the industry.
“It’s great news for Blackwell and Murray, but it’s not great news to Murray fans who have been waiting to see the books come out,” Blackwell publisher Andrew Miller said.