The deal will create one of the world's largest asset managers, with offerings in every major asset class.
The new heavyweight, which will run under the BlackRock name, will also become the top fixed income manager in the US.
BlackRock managing director in Australia Maurice O'Shannassy said the merger would lead to exciting times in terms of the manager's Australian offering.
"The merger dramatically enhances our capabilities in Australia. Our size now means that we can provide solutions to institutional and retail investors across equities, fixed income, alternates and real estate," O'Shannassy said.
He said there had been no overlap between BlackRock's business and MLIM in Australia.
Merrill Lynch has a 49 per cent stake in the company, with 45 per cent voting power.
PNC Financial Services Group, which owns 70 per cent of BlackRock, has a 34 per cent share and employees and shareholders own the remaining 17 per cent.
BlackRock chief executive Laurence Fink will be chairman and chief executive, while Ralph Schlosstein will continue as president and a director.
MLIM president and chief investment officer Robert Doll will become vice chairman and chief investment officer for global equities.
