Deal for browser firm will 'improve web experience' on feature phones in emerging markets.
The acquisition appears to have been driven by Nokia's desire to consolidate its high market share in India, China and elsewhere, where internet connectivity will be primarily by phone.
"Connecting the next billion consumers to the Internet will happen primarily on mobile devices," said Niklas Savander, EVP of services, Nokia.
"Delivering an optimised internet experience on our devices is core to our mission. By driving innovation in all segments of our portfolio, we are building one of the largest consumer audiences for web services and content.
"Novarra's Internet services technology delivered on the world's most widely-used mobile platform, Nokia's Series 40, will help us achieve this."
Novarra may be best known for its 2007 deal with Vodafone to transcode full web pages into mobile-optimised versions. This attracted some criticism at the time from developers.
Nokia expects a new service based on the Novarra platform to be available later this year.
The acquisition is expected to close in the second quarter of 2010, subject to the usual regulator stuff.
The deal proves Nokia's relentless appetite for acquisitions when the fit is right. In the last few years it's bought Enpocket, Navteq, Loudeye, Trolltek and others.