The boards of the two companies revealed that they have reached agreement on the terms of a recommended all-share acquisition.
In a statement to the Stock Exchange, Aviva said the move secures its position as "the leading insurance and savings business in the enlarged Aviva Group's home market, with 16 million customers in the UK prior to the deduction of overlapping customers".
Andy Briggs, the current group chief executive of Friends Life, will become chief executive of Aviva UK Life and will join its board.

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Sir Malcolm Williamson, the chairman of Friends Life, will join the board of Aviva as senior independent director.
Mr Williamson said: "Friends Life has built a strong and successful business under Andy Briggs' leadership.
"By combining the market-leading strengths of the two businesses, we will create the UK's leading insurance, savings and asset management business, delivering additional scale and efficiencies. This will provide enhanced outcomes for the increased customer base and for new customers into the future."
Mark Wilson, chief executive of Aviva, said: "This acquisition is financially and strategically compelling. It is one of those rare transactions where the two organisations fit with surgical precision, building on each other's strengths and addressing the challenges.
"Consistent with our investment thesis of cashflow plus growth, this transaction will increase our cashflows and reduce our leverage and support continued growth in our dividend. It secures our leadership position in our home market and gives greater flexibility to drive growth in other parts of the Aviva group.
"This is good for shareholders and customers alike who will benefit from being part of a stronger, more diversified and resilient business with a wide range of products."
John McFarlane, chairman of Aviva, said: "Aviva's recent success and sound growth and return prospects already present a compelling investment proposition and enable us to advance our strategy through acquisition as well as organic growth.
"The proposed acquisition not only consolidates Aviva's leading position which Aviva has established in the UK, it is expected to enable a much stronger dividend flow and balance sheet position than would otherwise have been possible. It also offers Friends Life shareholders an attractive outcome."

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