House of Fraser has agreed to a £351.4m takeover bid from a consortium led by the Icelandic investment firm Baugur.
House of Fraser's sales have been under pressure
The deal follows months of talks between the retailer, which has 60 stores across the UK, and Baugur.
Baugur said the 148 pence per share offer represented "good value", given the current challenging conditions on the High Street.
House of Fraser has been seen as a takeover target for years, with several possible bids failing to materialise.
Other consortium members include fellow Icelandic firm FL Group and Bank of Scotland.
The cash deal, which has been recommended by House of Fraser's board, is set to conclude in November.
"The partners in the consortium look forward to implementing their plans for House of Fraser to further develop it as the pre-eminent department store group in the UK," said Jon Asgeir Johannesson, chief executive of Baugur.
House of Fraser chairman Michael Wemms said the deal provided certainty to its shareholders and employees in "an uncertain economic environment".
The deal extends Baugur's already extensive interest in the UK retail industry.
It already owns a host of business including Hamley's, Goldsmith's and Karen Millen, as well as being a substantial shareholder in Woolworths.