According to a statement released on the LVMH website, the primary aim of the partnership is to boost the label's "worldwide development in terms of business and strategy", while also ensuring that it continues to promote "sustainable and ethical luxury fashion".
The British fashion designer will maintain majority ownership of the Stella McCartney brand, while also retaining her positions as its creative director and ambassador.
"Since the announcement of my decision to take full ownership of the Stella McCartney brand in March 2018 there have been many approaches from various parties expressing their wish to partner and invest in the Stella McCartney House," McCartney said.
"The chance to realise and accelerate the full potential of the brand alongside Mr Arnault and as part of the LVMH, while still holding the majority ownership in the business, was an opportunity that hugely excited me," McCartney stated.
The "full scope" of the collaboration between McCartney and the French luxury conglomerate will be revealed in September, the news release states.
Arnault said he is "extremely happy" to be working closely with McCartney on the development of her brand.
"It is the beginning of a beautiful story together, and we are convinced of the great long-term potential of her house," the business investor stated.
"A decisive factor was that she was the first to put sustainability and ethical issues on the front stage, very early on, and built her house around these issues. It emphasises LVMH Groups' commitment to sustainability."
McCartney launched her fashion label in 2001, in partnership with French luxury group Kering (then-called Gucci Group).
Last year, it was announced that Kering had sold its 50 per cent stake in the Stella McCartney brand to the designer.
Earlier this month, McCartney unveiled her new Beatles-inspired clothing collection.
The line consists of apparel inspired by the animated Beatles film Yellow Submarine, featuring a range of graphics, motifs and slogans which make direct reference to classic songs by the English rock band.
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