The value of the deal was not disclosed.
"Amazon and SOUQ.com share the same DNA - we're both driven by customers, invention, and long-term thinking," said Russ Grandinetti, Amazon Senior Vice President, International Consumer, in a statement.
Founded in 2005, Souq.com has emerged as the highest-valued internet company in the Middle-east last year after a funding round raised more than $275 million (250 million euros). Investors in the site include Standard Chartered Private Equity and the International Finance Corporation, a member of the World Bank Group.
Amazon's acquisition of Souq.com was challenged by a last minute bid by worth $800 million by Emaar Malls PJSC, the operator of the world's biggest shopping center on Monday.
The acquisition is expected to close in 2017, the companies said in a joint statement.