The US chemical producers agreed to sell significant asset sales to address competition concerns and gain European Union antitrust approval.
DuPont will divest large parts of its global pesticides business, including “almost the entirety” of its global research and development organisation.
Dow will dispose of two acid co-polymer manufacturing facilities in Spain and the US. It will also sell a contract with a third party through which it buys ionomers to South Korea's SK Innovation.
The deal will see the two companies combine and then break apart into three separate, publicly traded firms.
The European Commission was worried the merged company would reduce price competition and would have few incentives to produce new herbicides and pesticides.
"We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment," European Competition Commissioner Margrethe Vestager said in a statement.
"Our decision today ensures that the merger between Dow and DuPont does not reduce price competition for existing pesticides or innovation for safer and better products in the future."
The merger is expected to achieve cost savings of US$3bn. Dow said the deal also had the potential for US$1bn in growth synergies.
"Longer term, the intended three-way split is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each company will be a leader in attractive segments where global challenges are driving demand for their distinctive offerings," the company added.
Merger and acquisition activity elsewhere in the sector has been rumoured. China National Chemical Corp.'s US$43bn bid for Syngenta (NYSE:SYT) is reportedly expected to receive approval this week while Bayer and Monsanto are set to ask for EU approval in coming months.
Shares in Dow and Du Pont were little changed in US pre-market trade.