Prada's offer of 950p a share was 4 per cent below Wednesday's closing price, but 20 per cent more than the price before Church announced it was in talks with a potential buyer last week. The Italian group has received irrevocable approvals for the deal from 33 per cent of Church shareholders, including the Church family and institutional investors.
John Church, the UK firm's chairman who will remain head the group, said he was "pleased" with the deal, which does not include any planned job losses or significant restructuring.
He said: "The full potential of Church, particularly overseas, will be realised more effectively with the support of a strong luxury goods partner."
Church has 155 outlets across the UK, France, Italy, Belgium, Hong Kong, the US and Canada.
Patrizio Bertelli, Prada's chief executive, said: "Should our offer be successful, it is my firm intention to maintain and possibly strengthen the British identity of Church by preserving and developing its industrial presence in Northampton and by enhancing the role of the management team."
He said the UK group would benefit from his company's marketing and distribution expertise.
The Prada bid comes a week after Italian shoes and bags maker, Diego Della Valle, raised his stake in Church from 6.3 per cent to 8.6 per cent, overtaking Prada's 8.5 per cent share.
Mr Della Valle would not comment yesterday on whether he planned to make a counter-bid.