The social network announced Monday it acquired the photo-sharing site in a post from founder Mark Zuckerberg, and the Wall Street Journal reported the deal was done for $1 billion.
"For years, we've been focused on building the best experience for sharing photos with your friends and family," Zuckerberg wrote in his Facebook post. "Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people."
Facebook will pay for the company in stock and cash, the Journal reported.
Instagram, which originated as an app for the iPhone, became available to Android users last week and added one million users in just 12 hours to its existing 30 million user base.
The San Francisco-based startup, which had 13 employees at last count, became available to the public in October 2010.
Zuckerberg said Facebook plans to keep the app much as it is for users, allowing people to keep their Instagram photos off Facebook if they don't want to post them there, and share their pictures on other social networks as well.
"This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users," he wrote. "We don't plan on doing any more of these, if any at all."
Instagram reiterated that message to its users in its own blog post Monday.
"It’s important to be clear that Instagram is not going away," CEO Kevin Systrom wrote. "The Instagram app will still be the same one you know and love."
On Friday, All Things D reported Instagram was set to be valued at $500 million and would receive $50 million in its Series B round of funding, led by Sequoia Capital.