The deal announced Wednesday will expand the Indian carmaker's reach around the globe.
Tata will pay $2.3 billion for the storied British brands, but at closing, Ford will pay about $600 million into the Jaguar-Land Rover pension fund, Tata's statement said.
Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. But it has been struggling and wants to focus on its main brands.
Tata said the transfer of the brands would take place at the end of the second quarter.
Tata said it expects no significant changes in the terms of employment for Jaguar and Land Rover's 16,000 workers.
The agreement had been in the works for months as cash-strapped Ford sought money to fund its turnaround plan.
"Jaguar and Land Rover are terrific brands," Ford CEO Alan Mulally said in a statement. "We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata's stewardship.
"Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all."
Tata said in its statement Ford will continue to supply engines, transmissions and other components "for differing periods." Ford also will continue to provide environmental and other technologies as well as engineering support.
Tata Chairman Ratan N. Tata said his company will try to build on the brands' heritage, keeping their identities intact.
"We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business," he said in a statement.
Roger Maddison, an official with Unite, Jaguar and Land Rover's main labor union, said the deal is good news for the automakers' employees as well as those who work for parts suppliers.
"Unite has secured written guarantees for all five UK plants on staffing levels, employee terms and conditions, including pensions, and sourcing agreements. The sale ensures our members futures and we look forward to working with Tata," Maddison said in a statement.