Berkeley Group is to pay £191m to its joint venture partner RWE Thames Water for the 50% of the developer St James that it does not own.
The purchase is split into two payments, one of £98m for the business, and another of £94m for six development sites, and to pay outstanding creditors.
St James was established in May 1996 and over the past 10 years has sold 5000 units.
It announced operating profit of £35m on turnover of £320m on 31 December 2005.
The major projects that St James is working on include Grosvenor Waterside in Pimlico, London, and The Hamptons at Worcester Park in Surrey.