Boston-based State Street will take over the company in a bid to control a greater part of the mutual fund and hedge fund asset market.
Analysts predict that the acquisition will eventually see State Street servicing around a third of the mutual fund market worldwide, and a quarter of the hedge fund industry, according to Reuters.
Commenting on the deal, State Street's chief executive Ronald Logue said that the similarity between the two companies would ensure that the eventual merger would run smoothly.
"Investors Financial Services Corporation and State Street already share a similar focus, service model and customer type, which makes for a seamless and swift consolidation," he said in a statement.
"Based on our strong track record of managing large transitions and meeting our goals, we are confident that this acquisition will deliver considerable value to our shareholders, customers and employees.
He added that the joining of the two Boston companies would ensure that the city maintained its "significance as a major global hub" for investment servicing.