The Wall Street Journal reported earlier the deal could be announced Monday.
Waste Management will pay $33.15 a share in cash for Advanced Disposal, which represents a 22.1% premium to Advanced Disposal's closing price Friday of $27.14. Including debt, the deal is worth $4.9 billion.
Advanced Disposal shares rose 19.6% on Monday to $32.46. Waste Management rose 3.4% to $105.25.
The transaction merges the No. 1 and No. 4 companies in the sector and would rank as one of the biggest solid-waste company acquisitions in more than a decade. It also is Waste Management's biggest acquisition in its history, according to the Journal.
Advanced Disposal serves about 2.8 million residential customers and 200,000 commercial customers in around 16 states and the Bahamas. The company went public in 2016 and is part-owned by the Canada Pension Plan Investment Board, which has agreed to vote for the deal, according to the Journal.