The US$166 million deal involves US$154 in cash, with the remainder being in Atlassian restricted shares.
Atlassian sees AgileCraft as a good fit because it provides a way of connecting the engineering and IT teams that use Atlassian products with the business objectives and outcomes of the enterprise.
Companies, including AT&T, Dimension Data, Fidelity, and Nielsen, already use Atlassian and AgileCraft products together.
"As Atlassian tools spread through organisations, technology leaders need better visibility into work performed by their teams. With AgileCraft joining Atlassian, we believe we’re the best company to help executives align the work across their organisation, providing an all-encompassing view that connects strategy, work, and outcomes.”
AgileCraft founder and chief executive Steve Elliott said: "Organisations lack the ability to easily gather and distill information across siloed teams, making it extremely difficult to assess progress and measure success.
"We're excited to be joining the Atlassian family to enable the new digital enterprise, which is able to connect teams and align strategy to outcomes."
The transaction is expected to close in April, subject to certain conditions and with the price subject to customary adjustments.