The victory sees WPP take control of a fourth major advertising network in Grey Worldwide, which joins Ogilvy & Mather, J Walter Thompson and Young & Rubicam, as well as the media buying powerhouse MediaCom, which becomes the British firm's third media network alongside Mediaedge:cia and MindShare.
Richard Oldworth, a spokesman for WPP, said: "WPP can confirm that negotiations were completed last night and an announcement will be made tomorrow."
WPP, which is controlled by chief executive Sir Martin Sorrell, said it would reveal further details of the deal on Monday, including the price it paid for Grey Global, which is understood to be worth about $900 a share, or more than $1.25bn (£700m).
The deal means that WPP now has major client relations with the world's two largest consumer goods giant in Unilever and Procter & Gamble, a major client of Grey, and which had given its blessing to any possible WPP bid.
On Friday, investors in Grey Global expressed disappointment about the size of the bids received on Wednesday evening, as WPP was tipped as the early leader in the race to acquire the US advertising holding company.
WPP was best placed of the three bids to be able to find efficiencies and make the deal financially viable. It will likely merge back-office functions, although it is unlikely to combine any of the agencies it has acquired with its existing businesses.
As well as Grey Worldwide and MediaCom, WPP will take ownership of PR networks APCO and GCI Group.
The loss of Grey Global is a particular blow for Havas, because a deal was seen as the mid-sized French group's last real chance to step up and compete with the major holding companies such as WPP and its rivals Omnicom, Publicis Groupe and Interpublic Group.
Failure to secure Grey now makes it a possible takeover target because there are no remaining partners left for it to team up with.
It is the second time that Havas has lost out to WPP. Three years ago, it saw WPP win control of Tempus, which owned media buying firm CIA. WPP has since merged CIA with Mediaedge.
Sir Martin is reported to have agreed, as part of the deal, that Grey chairman Ed Meyer, who will net a personal fortune of $34m, will stay on after the acquisition is complete.
According to a report in the Sunday Times today, Havas and Hellman & Friedman each raised their offers after last Wednesday's bidding deadline passed. San Francisco-based Hellman is said to have raised its bid to about $925 a share and Havas raised its offer to more than $900 a share.
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