The dermatology portfolio of Astellas comprises of both prescription and over-the-counter (OTC) products, including Protopic, Locoid and Locobase, and Zineryt to treat eczema, acne and skin infections.
Subject to the satisfaction of customary closing conditions, including review and approval by competition authorities, the transaction is scheduled to be completed in the first quarter of next year.
According to LEO, the transaction does not include any manufacturing facilities of Astellas.
Once the dermatology portfolio is fully transferred, annual turnover of LEO Pharma is estimated to increase by more than 20%.
LEO Pharma CEO and president Gitte Aabo said: "This is a historic milestone for LEO Pharma and will be instrumental in our efforts to help even more people living with skin diseases.
"With our expanded portfolio, we will be able to offer patients an even wider range of treatment solutions to meet their individual needs."
The acquisition will create a strong foothold for LEO in the Chinese and Russian markets as well as adds critical scale in many other markets.
Astellas Pharma president and CEO Yoshihiko Hatanaka said: "We feel that dermatology patients around the world will be better served by transferring these products to LEO Pharma, a company with a strong focus on the dermatology therapeutic area."
LEO is focused on developing, manufacturing and marketing pharmaceutical drugs to dermatologic and thrombotic patients in more than 100 countries.
The company has its own sales forces in 61 countries and employs around 4,800 people across the globe.
Upon completion of the acquisition, both the firms will jointly work to ensure a smooth and effective transition of the products and business to LEO Pharma.