The Palo Alto-based company had been seen as a potential suitor for the struggling Palm. Palm's smartphones have struggled to compete with the likes of the iPhone or the Droid. Palm makes a series of smartphones powered by the Palm webOS mobile operating system.
Both HP and Palm boards of directors have already approved the deal, according to HP.
The acquisition will better position HP to compete in the growing smartphone industry.
HP said Palm's webOS operating system will help it participate more aggressively in the fast-growing market for smart phones and connected mobile devices. It also said Palm's current chairman and CEO, former Apple Inc. executive Jon Rubinstein, is expected to remain with the company.
“Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices,” said Todd Bradley, executive vice president, Personal Systems Group, HP.
The transaction is expected to close by the end of July.