The Saudi-backed LIV Golf was launched in June 2022, causing disruptions to the men's game.

The merger is set to end all pending litigations between the parties.

The agreement includes DP World Tour with PGA claiming it will "unify the game of golf".

"The PGA TOUR, DP World Tour and the Public Investment Fund (PIF) today announced a landmark agreement to unify the game of golf, on a global basis," a statement from PGA read.  

"The parties have signed an agreement that combines PIF’s golf-related commercial businesses and rights (including LIV Golf) with the commercial businesses and rights of the PGA TOUR and DP World Tour into a new, collectively owned, for-profit entity to ensure that all stakeholders benefit from a model that delivers maximum excitement and competition among the game’s best players."

The "new entity" is set to benefit from "capital investment" from the PIF, with a name yet to be declared.

LIV Golf is bankrolled by the Public Investment Fund (PIF) of Saudi Arabia, with critics accusing it of another elaborate sportswashing project by the Gulf nation with poor human rights record.

The breakaway league attracted some of the biggest names in golf like United States' Phil Mickelson, former world number one Dustin Johnson, reigning PGA Championship winner Brooks Koepka and Australian Cameron Smith.

Players who participated in LIV Golf was barred from PGA Tour events, with both parties involved in legal battles since.

Eleven golfers filed an anti-trust lawsuit against PGA Tour initially and the case was due to be heard in 2024.

In April, the DP World Tour, formerly the European PGA Tour, won a legal battle against 12 golfers who committed "serious breaches" of the Tour’s code by participating in LIV Golf without permission.

The players were ordered to pay fines of £100,000 ($124,086/€116,113) within 30 days.

Players such as Lee Westwood of England, Sergio García of Spain, Ian Poulter of England and Henrik Stenson of Sweden quit their DP World Tour membership, becoming ineligible or the Ryder Cup scheduled to start on September 29.  

Stenson was replaced as captain of European team by Luke Donald of England after the former joined LOIV Golf.

However, the merger allows them to comeback as the new entity has pledged a "fair and objective process" for players to re-apply for membership.

PGA Tour commissioner Jay Monahan termed the merger as a "historic" day for golf.

"After two years of disruption and distraction, this is a historic day for the game we all know and love," said Monahan.

"This transformational partnership recognizes the immeasurable strength of the PGA TOUR’s history, legacy and pro-competitive model and combines with it the DP World Tour and LIV - including the team golf concept - to create an organization that will benefit golf’s players, commercial and charitable partners and fans.

"Going forward, fans can be confident that we will, collectively, deliver on the promise we’ve always made - to promote competition of the best in professional golf and that we are committed to securing and driving the game’s future.

"We are pleased to move forward, in step with LIV and PIF’s world-class investing experience, and I applaud PIF Governor Yasir Al-Rumayyan for his vision and collaborative and forward-thinking approach that is not just a solution to the rift in our game, but also a commitment to taking it to new heights.

"This will engender a new era in global golf, for the better."

DP World Tour chief executive Keith Pelley has declared this as a "momentous day" for golf and said the merger will make golf "stronger than ever".

"Today is a very exciting day for this special game and the people it touches around the world," said PIF governor Yasir Al-Rumayyan.

"We are proud to partner with the PGA TOUR to leverage PIF’s unparalleled success and track record of unlocking value and bringing innovation and global best practices to business and sectors worldwide.

"We are committed to unifying, promoting and growing the game of golf around the world and offering the highest-quality product to the many millions of long-time fans globally, while cultivating new fans.

"There is no question that the LIV model has been positively transformative for golf.

"We believe there are opportunities for the game to evolve while also maintaining its storied history and tradition.

"This partnership represents the best opportunity to extend and increase the impact of golf for all. We look forward to collaborating with Jay and Keith to bring the best version of the game to communities around the world."