Al Jazeera said t would buy Current TV, the struggling cable channel founded by Al Gore and partners, in a move that will boost the Qatar-based broadcaster's footprint in the US.
Terms were undisclosed, but analysts estimated the deal could be worth as much as $500m.
Al Jazeera said it would start a new US-based news channel with the acquisition.
This would make it available in more than 40 million US households, up from 4.7 million prior to the deal.
The deal brings Al Jazeera, which operates under the patronage of the emir of Qatar and his family, into closer competition with American news channels like CNN, MSNBC and Fox.
But the award-winning channel that is seen in more than 260 million homes in 130 countries faces hurdles with US distributors and viewers, television industry analysts said. Current, a liberal channel which has battled low viewership, had been distributed in about 60 million of the 100 million homes in the US with cable or satellite service.
One of its distributors, Time Warner Cable, which accounted for about 12 million of those homes, said last night that it was terminating its carriage deal.
"Our agreement with Current has been terminated and we will no longer be carrying the service. We are removing the service as quickly as possible," Time Warner Cable said in a statement. Current is also distributed by Comcast Corp and DirecTV, with 22.4 million and 19.8 million subscribers, respectively.
Current said Gore, its chairman, and co-founder Joel Hyatt, the chief executive officer, will remain on the advisory board.
Analysts said Al Jazeera would have to overcome a significant image problem in the US, where many viewers remember its stridently anti-war reporting of the conflicts in Iraq and Afghanistan. Al Jazeera has only been shown in a handful of cities.
It said its new US-based news channel would be separate from Al Jazeera English, and would provide both domestic and international news for American audiences. The new channel would air in 2013 and would be headquartered in New York City.
In addition to existing offices in New York, Washington DC, Los Angeles, Miami and Chicago, Al Jazeera would open more offices and would double its US-based staff to more than 300 employees.
Current was co-founded in 2005 but never caught on. It shifted to a more liberal format from 2011, but ratings continued to disappoint, said Brad Adgate, senior vice president of research at Horizon Media, who pegged its average daily audience under 50,000 viewers and the value of a deal at $400 million to $500m.
Disputes between pay TV distributors and cable networks have risen lately. Time Warner Cable also dropped arts-focused cable channel Ovation over its low ratings and the high costs of carrying the network.