The agreement only covers Starbucks' packaged goods sold outside the U.S. company's stores.
Nestle, which will take on about 500 Starbucks employees, said its ongoing share buyback program remained unchanged.
In the third-biggest transaction in Nestle SA's 152-year history, the Swiss food giant will spend $7.15 billion for the right to market Starbucks Corp. products from beans to capsules, marrying its global distribution network with the allure of arguably the biggest name in java.
According to Nestle's chief executive Mark Schneider, who became the first outsider to run Nestle in nearly 100 years in 2016, the deal was a "significant step".
It said the Starbucks packaged goods business generates annual revenue of about $2 billion a year.
Nestle shares rose 1.4% by mid-session, having fallen by more than 8% so far this year.
The world's largest packaged food producer won't get any fixed assets in the deal, but expects Starbucks' name recognition both in the United States and across the globe to expand its market share.
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While Starbucks holds the crown in the US$13.8 billion United States coffee market, Nescafe and Nespresso hold the top ranks globally, according to Euromonitor.
That added complexity may make it harder to run the coffee business, and there's a risk that the Starbucks food-service sales cannibalize those of Nescafe.
With an estimated net worth of $44 billion, Starbucks was ranked the second most valuable brand in fast food, according to BrandZ's Global 2017 report.
"However, Nestle's leadership position is less secure than it once was". "Nestle's acquisition track record over the last 10-15 years has been less than stellar", Andrew Wood, an analyst at Sanford C. Bernstein, told Bloomberg.
Nestle hinted previous year that it was looking at focusing on higher-growth areas like pet care, coffee and infant nutrition. It sold its Tazo tea brand to Unilever for $384 million and closed underperforming Teavana retail stores.
The company's US$425 million purchase of a stake in Blue Bottle Coffee past year was a step back into the segment, whose growth prospects have revived as coffee consumers become more sophisticated.
Nestle, the world's largest packaged food company, is also not shy when it comes to partnering with rivals through licensing deals or joint ventures, having reached arrangements with General Mills' and Hershey, among others.