It comes after shareholders of Melbourne-based Kidman overwhelmingly voted in favour of the $1.90 per share offer last month.
Wesfarmers now holds 50% of the Mt Holland lithium project in Western Australia, a joint venture with Chile's SQM.
"This acquisition and our planned future investment is an attractive opportunity to participate in the development of a large-scale, long-life and high-grade lithium hydroxide project in Western Australia in partnership with a global leader in the lithium industry," Wesfarmers managing director Rob Scott said.
"It leverages and builds on the existing strengths and chemical processing capabilities within our Chemicals, Energy and Fertilisers business, while supporting Western Australia's ambition to become a global hub for downstream lithium processing."
The partners are targeting a feasibility study and investment decision on the Earl Grey mine and lithium hydroxide facility early next year.
Kidman shares are expected to cease trading today.
