The Finnish company says it will spend $78 a share for Navteq, financed with cash and debt. Nokia had 8.3 billion euros ($11.8 billion) in cash and other liquid assets as of the end of June.
Already selling more cell phones around the globe than any other handset maker, Nokia has been aiming to add software and services like music, games and navigation to its business. In addition to generating new revenue streams, it sees these endeavors as ways to help differentiate its products from its competitors' handsets.
Earlier this year at the 3GSM trade show in Barcelona, Nokia introduced its first GPS-enabled phone, the 6110 Navigator. The company also launched a navigation service that allows users to download maps.
Using the handset's embedded software, consumers can view their current location on a map, search for destinations, find specific routes, or locate nearby services such as restaurants, hotels or shops.
Location-based services are "one of the cornerstones of Nokia's Internet services strategy," Nokia CEO Olli-Pekka Kallasvuo said in the statement. "By joining forces with Navteq, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market."
Nokia also said Navteq would continue to support its existing customers. The Navteq map data business will continue to operate independently, but it will be organized as a Nokia group company.
Navteq has been viewed as a takeover target since this summer, when navigation device maker TomTom said it would pay 1.8 billion euros ($2.55 billion) for Navteq's top rival in the mapping market, Tele Atlas.
Nokia's shares were trading down 2.43 percent to $37.01 on Monday after the news was announced.