Fujifilm will own 50.1% of Xerox shares, and combine Xerox with Fuji Xerox, their joint venture in which the Japanese company already holds a 75% stake.
Xerox-the iconic American company that began in Rochester, New York in 1906-has been acquired by Fujifilm for $6.1 billion.
Xerox had also been under pressure from activist shareholder Carl Icahn, the company's largest shareholder, who demanded the US stakeholder alter or end its joint venture with Fujifilm.
The combined company is expected to deliver $1.7 billion in total annual cost savings by 2022, $1.2 billion of which is expected to be achieved by 2020.
Reuters reports the Fujifilm will take a majority stake in the photocopying leader and merge the US company with their longtime Fuji Xerox joint venture in a move to save as much as $1.7 billion.More news: Rocket fire from Syria's Afrin kills one in Turkish border town
Fujifilm CEO Shigetaka Komori said he's "confident" the partnership will help with the reinvention of the companies. "It's going to be a big year for apps and partners building on Xerox's app platform".
The WSJ had reported earlier this month that Fujifilm and Xerox were talking about an array of possible alternatives that might or might not involve a change of control for Xerox. The combined company will go to market and maintain the iconic "Xerox" and "Fuji Xerox" brands within its respective operating regions.
Icahn and fellow large shareholder Darwin Deason in mid-January called for Xerox to evaluate strategic options related to the joint venture.
The planned merger was announced on Wednesday. Xerox has a market cap of about $8.32 billion.