The US fund giant was reported earlier this week to be considering a takeover in the region of £390 million.
Source has now announced the deal, saying a ‘definitive agreement’ has been reached. But no details of the fee involved were released.
Invesco is the fourth largest ETF provider globally.
Mike Paul, executive chairman, said: “The combining of Source with Invesco PowerShares ETFs will further enhance our ability to help clients meet their investment objectives.
“The fit between Source and Invesco PowerShares is exceptionally complementary in terms of product range, a shared focus on clients and a history of innovation. The combined business will be a true leader in the ETF market across Europe and its target markets.
“We are very proud to have built Source into one of Europe’s most competitive, and innovative ETF providers and look forward to the many opportunities now afforded by this transformative stage in our development.”
He added: “Subject to regulatory approval, we expect the acquisition to complete in Q3 2017, and whilst we will now begin planning for our combined organisation, we remain focussed on our clients and new product innovation.”