High street bookmaker Ladbrokes Coral has agreed to a takeover by online rival and Foxy Bingo owner GVC in a deal worth up to £4 billion.
It comes after the pair said earlier this month that they were in "detailed" discussions over a cash and shares tie-up.
The deal follows two previous attempts at a combination between the pair, with the most recent discussions breaking down in the summer over price and amid uncertainty ahead of the Government's gambling review.
The deal will see the creation of an online-led global gambling giant, combining Ladbrokes' high street and online operations with GVC's stable of brands, including Sportingbet and PartyCasino.
Under the terms of the takeover, GVC will own around 53.5% of the enlarged group and its chief executive, Kenneth Alexander, would take the reins.
Ladbrokes completed its £2.3 billion merger with Gala Coral in November last year.
It comes amid a wave of consolidation in the sector, which has been under pressure pending the review, which is expected to significantly cut earnings from the lucrative betting machines - dubbed the crack cocaine of gambling.
The initial value of the deal stands at £3.2 billion, rising to £4 billion under certain circumstances.