The two companies, in a joint statement, said that their boards have decided to unanimously recommend the transaction to their respective shareholders.
They said that Reuters Founders Share Company, which controls a special "golden" share that can block any hostile takeover attempt, has resolved to support the deal.
Woodbridge, the Thomson family holding company which controls about 70 per cent of Thomson, has also committed to vote in favour of the deal, the statement said.
The merged entity, to be called Thomson-Reuters, would be listed in London as well as Toronto, and would be headed by incumbent Reuters CEO Tom Glocer. The combination of Reuters' financial and media businesses and Thomson Financial unit would retain the Reuters brand.
The merged entity would be the largest financial data provider, with 34 per cent market share against Bloomberg's 33 per cent.
The two companies have maintained that a potential deal would result in annual synergies worth over $500 million within three years.
Under the transaction, Reuters will be bought by a newly formed holding company, Thomson-Reuters PLC, through a scheme of arrangement in which each Reuters share will be entitled to 352.5 pence in cash and 0.16 Thomson-Reuters PLC shares.
The offer values the entire existing issued share capital of Reuters at approximately £ 8.7 billion ($17.2 billion).
