It was not immediately clear whether the acquisition would result in any store closures, but the companies said in a statement that Springfield, Mo.-based Bass Pro Shops would "celebrate and grow" the Cabela's brand.
The deal comes about 10 months after Sidney, Neb.-based Cabela's effectively put itself up for sale at the urging of hedge fund Elliott Management, which had declared the hunting-and-fishing retailer undervalued and called for the company to consider a sale or reorganization.
Privately held Bass Pro Shops will pay $65.50 per share in cash for Cabela's, representing a premium of 19.2% over Friday's closing price.
Cabela's shares rose 14.7% to $62.99 in pre-market trading Monday.
Long known for large-format destination stores, Cabela's has lost ground to smaller, nimbler competitors and online retailers. Sales at stores open at least a year fell 1.3% in the first half of 2016, compared to a year earlier, according to a securities filing.
The number of purchases at Cabela's stores fell 8.1% during that period, reflecting a drop-off in foot traffic as customers bought less clothing and footwear from the retailer, although hunting sales increased and average revenue per transaction rose 8.2%.
The deal marks a dramatic expansion of the outdoor retailing empire controlled by Bass Pro Shops CEO Johnny Morris, who founded the company in 1972. The billionaire will lead the newly combined entity as CEO and will retain majority ownership.
Bass Pro Shops has about 99 stores and 20,000 employees. Cabela's has about 85 stores and had about 19,700 employees at the end of 2015, according to securities filing.
"The story of each of these companies could only have happened in America, made possible by our uniquely American free enterprise system," Morris said in a statement. "We have enormous admiration for Cabela’s, its founders and outfitters, and its loyal base of customers."
Cabela's CEO Tommy Millner said the company's board had unanimously backed the sale after "a thorough strategic review."
Bass Pro Shops said it plans to maintain Cabela's operations in Sidney and Lincoln, Neb. "and hopes to continue the very favorable connections to those communities and the Cabela’s team members residing there."
The companies said they expect the deal to be approved in the first half of 2017.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.