The London Stock Exchange is taking over competitor Turquoise and the platform is set to be migrated to its MillenniumIT trading platform.
The deal, which involves no money changing hands, will see the technology used by Turquoise dropped.
The London Stock Exchange will run the loss-making Turquoise and try to turn it around for the next two years in exchange for 60% of the shares. It will incur costs of £20m related to the deal. These will include winding up legacy technology systems, exiting contracts and integration.
The remaining 40% of the shares will be retained by the investment banks that launched Turquoise, which include Goldman Sachs and Morgan Stanley.
Turquoise, which lost £15.8m in its last financial year, will be migrated to the London Exchange's new trading platform, which is being installed over the next year.
"It will be put on to Millennium," said a London Stock Exchange spokesman. "There is no timeframe for this, but it will be sometime next year."
The deal depends on approval form the Financial Services Authority (FSA) and the Office of Fair Trading (OFT).
Turquoise uses off-the-shelf software from Cinnober for its core trading platform. This software has been heavily customised.
The Turquoise platform has a Dark pool which enables investment firms to trade off the exchange. The London Stock Exchange is developing such a platform, known as Baikal.
|Turquoise launch timeline|
|November 2006 Planned launch of pan-European trading platform Project Turquoise announced.|
|18 April 2007 Turquoise selects EuroCCP clearing and settlement application.|
|25 October 2007 Announces Cinnober as trading platform provider and begins building IT infrastructure.|
|13 November 2007 Appoints Yann L'Huillier as the chief technology officer.|
|28 January 2008 Progress Software and Detica chosen to deliver a real-time market surveillance system.|
|14 February 2008 Partners with AppLabs for platform testing.|
|26 February 2008 Selects BT for secure hosting services.|
|April 2008 Planned completion of implementation of IT infrastructure.|
September 2008 Planned launch.