The news quickly raised concerns about the reach of Comcast, which owns NBCUniversal's film and television assets and is one of the largest providers of Internet service via cable.
A joint statement said the all-stock merger "will create a leading technology and innovation company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale."
Comcast chairman and chief executive Brian Roberts said: "In addition to creating a world-class company, this is a compelling financial and strategic transaction for our shareholders."
Roberts said the plan would allow Comcast to deploy new technologies for delivering streaming content and use the Internet cloud with greater efficiency.
The joint announcement of the friendly merger marks Comcast's triumph over its rival for the deal, the nation's fourth largest cable operator Charter Communications, and its biggest shareholder, Liberty Media Corp.
The deal amounts to $158.82 per share, about $23 a share above where TWC has been trading and comfortably above Charter's offer of $132.50 a share, which was rejected as too low.
Comcast is already the dominant force with nearly 22 million video subscribers, compared to Time Warner Cable's estimated 12 million.
The companies said the merger agreement is subject to shareholder approval at both companies and regulatory review.
But the news immediately raised concerns about the creation of a dominant force which spans cable, Internet and the content flowing over the networks.
John Bergmayer at the consumer activist group Public Knowledge urged regulators to block the deal.
"Comcast cannot be allowed to purchase Time Warner Cable. Antitrust authorities and the FCC (Federal Communications Commission) must stop it," Bergmayer said in a statement.
"If Comcast takes over Time Warner Cable, it would yield unprecedented gatekeeper power in several important markets. It is already the nation's largest ISP, the nation's largest video provider, and the nation's largest home phone provider. It also controls a movie studio, broadcast network, and many popular cable channels."
He said that the enlarged Comcast "would be the bully in the schoolyard, able to dictate terms to content creators, Internet companies, other communications networks that must interconnect with it, and distributors who must access its content."
Comcast said that in order to address competition concerns, it is prepared to divest systems serving about three million subscribers, leaving a net gain of approximately eight million.
That would bring Comcast's managed subscriber total to roughly 30 million, the company said.
Other analysts said regulators may approve the deal but possibly impose conditions.
"While we see no fundamental barrier to deal approval, conditions may be placed on the combined company to amplify and extend the types of conditions that were placed on the Comcast-NBCU deal in 2010 aimed at fostering online and video competition," said RBC Capital Markets analyst Jonathan Atkin.Mike McCormack at Jefferies said the divestment of some cable operations "should alleviate some concerns" by regulators.