Swatch, the world's largest watch company, will also assume $250 million in debt.
The Toronto-based diamond miner and retailer announced early Monday that the transaction is still subject to regulatory approvals.
Harry Winston Diamond (TSX:HW) says it has agreed to change its name to Dominion Diamond Corp. after the deal closes.
The two companies also plan to explore opportunities for a joint diamond polishing venture.
Swatch says Harry Winston will complement the prestige segment of the group.
"We are proud and happy to welcome Harry Winston to the Swatch Group family _ diamonds are still a girl's best friend," said chairwoman Nayla Hayek.