The 99-year-old car-maker will get an injection of Italian expertise and much-needed resources to compete with luxury competitors such as the Fiat Ferrari.
There had been a bid from Indian jeep maker Mahindra & Mahindra for a stake in the British manufacturer, whose flashy vehicles featured frequently in James Bond movies.
Aston Martin said it would now proceed "with its extensive and exciting plans for sustainable long-term growth".
The car-maker rose to fame thanks largely to its DB5 sportscar, a favourite of early Bond actor Sean Connery, which returned to the limelight in Daniel Craig's car chase through Italy in the 2008 Quantum of Solace.
Aston Martin said the vehicles would continue to be made in Gaydom in Britain, where 1,600 workers are employed.
Andrea Bonomi, senior principal at Investindustrial, said: "We are delighted to form part of this iconic global, but quintessentially British brand."
Sales at Aston Martin have been hurt as a result of the global economic slowdown and the company had been looking for funding for its research and development programmes
Aston Martin said it intended to invest "more than half a billion pounds in its new product and technology programme over the next five years."
The car-maker is owned by Kuwait-based finance firm Investment Dar, which bought it from Ford Motors for $767m in 2007.
Investindustrial, is owned by Italy's Bonomi family and previously owned Italian motorcycle manufacturer Ducati.
Source: AFP via I-Net Bridge
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