The deal - which may be the biggest ever in e-commerce - gives Walmart greater access to an Indian e-commerce market that Morgan Stanley has estimated will grow to $200 billion in about a decade.
The remainder of the business will be held by some of Flipkart's existing shareholders, including Flipkart co-founder Binny Bansal, China's Tencent Holdings Ltd, Tiger Global Management LLC and Microsoft Corp, the company said.
Co-founder Sachin Bansal has meanwhile decided to make his exit and has sold his stake in Flipkart to Walmart.
The retailer said it expects India's ecommerce market to grow at four times the rate of the overall retail industry.
Additionally, Walmart's investment includes $2 billion of new equity funding, which will help Flipkart accelerate growth in the future. Son said that with the Walmart deal, that investment is now worth $4 billion.
In a surprise move, Walmart's acquisition of Flipkart is also back by Google who has brought in $1.5 billion for a 7 percent stake in the e-commerce company. Walmart says it will retain the founding principles of Flipkart and focus on job creation, supporting small business, Make in India, support farmers and develop supply chains and reduced food waste.
The board will work to maintain Flipkart's core values and entrepreneurial spirit, while ensuring it has strategic and competitive advantages.Closing is expected later this calendar year, subject to regulatory approval. The news has been confirmed on Wednesday afternoon by Mayaosho Son, CEO of SoftBank. E-commerce sales in India hit $21 billion previous year according to market research company Forrester, and are expected to soar as its population of 1.25 billion people make greater use of internet access. This underlines that the market is maturing and attests that multi-billion dollar exits are possible in India.
Launched in October 2007, Flipkart is India's largest e-commerce marketplace.
Walmart has won the bidding to acquire Indian e-commerce platform Flipkart, beating Amazon to the deal.
Flipkart, India's biggest online retailer, is a key part of Walmart's efforts to expand in the country and strike a blow against Amazon.com Inc.in the world's second-most populous nation.
The Japanese tech company has further planned to sell some of its stake in Sprint, the American wireless company.
Here's how the structure of Walmart and Flipkart deal looks like.
Flipkart's parent firm has reportedly posted loss of Rs 8,771 crore for the financial year ending March 2017. Walmart India now operates 21 Best Price cash and carry stores and fulfillment centers in nine states across the country.
Among other initiatives, Walmart will partner with kirana owners and members to help modernize their retail practices and adopt digital payment technologies.